The trustee-manager of Asian Pay Television Trust (APTT) says its lead arranger has received commitment letters from sufficient lenders for the refinancing of APTT’s offshore facilities.
The facility agreement is expected to be signed in January 2023 with the financial close expected to be in July 2023, upon the maturity of the existing offshore facilities.
The existing offshore facilities comprise a $125 million term loan facility and a $80 million revolving loan facility. Of the $125 million term loan facility, $78.4 million is currently outstanding, while $58.5 million from the $80 million revolving loan facility is currently outstanding.
After including the impact of scheduled repayments until the financial close, the size of the refinanced facilities will be reduced to a $46.6 million term loan facility and a S$75 million revolving loan facility on financial close.
“The substantial reduction in the size of the offshore facilities reflects the results of APTT’s debt management programme,” says APTT’s trustee-manager. “A key focus has been to make accelerated debt repayments, using cash generated from operations, to lower gearing and save on interest costs. This is especially important in today’s rising interest rate environment.”
The refinanced facilities will be on the same major terms. They will start immediately upon the maturity of the existing offshore facilities for 30 months.
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The refinanced facilities will bear a floating interest rate plus an interest margin. The floating interest rate will be revised from the Singapore Interbank Offered Rate (SIBOR) to the compounded Singapore Overnight Rate Average (SORA), plus a pre-agreed adjustment spread, to account for historical differences between SIBOR and SORA.
According to the trustee-manager, the interest margin will range from 4.1% to 4.9% per annum (p.a.) based on the group’s leverage ratio. This is compared to 4.1% to 5.5% for the existing offshore facilities.
Taipei Fubon Commercial Bank Co., Ltd. is the lead arranger and facility agent for the refinancing of the offshore facilities.
“We are pleased to have received the necessary commitments to refinance our offshore facilities on the same major terms. This reflects lenders’ confidence in APTT’s business and the management. We have been recording consistently healthy net cash flows for years, while our broadband business has been growing steadily,” says Brian McKinley, CEO of the trustee-manager.
With this refinancing, the principal repayment schedule and financial covenants for the offshore facilities will be reset. The trustee-manager will also not have to revisit borrowing facilities till 2025 with this.
“Although our offshore facilities represent only 10% of the group’s total outstanding debt, higher Singapore interest rates mean that we will incur higher interest costs going forward since we do not hedge our offshore facilities. Our overall exposure to rising interest rates, however, is contained since over 90% of our onshore facilities are hedged against the risk of rising interest rates through to June 30, 2025. Given that our onshore facilities comprise 90% of total debts, the impact of rising interest rates is not expected to substantially affect our business operations,” McKinley adds.
Units in APTT closed flat at 11.1 cents on Dec 30.
