True Move Company US$690 million debt tender and consent solicitation

Sole dealer manager: Deutsche Bank

Thailand’s third largest mobile operator True Move Company undertook a liability management exercise to secure funding for projected capital expenditures (capex) for its 800MHz spectrum roll-out and to bid for the 3G WCDMA (wideband code division multiple access) licence.

However, this was not possible under the existing covenant structure in its US$465 million 10.75% bonds due 2013 and the US$225 million 10.375% bonds due 2014. In addition, the required capex would have resulted in a material pro-forma increase in the company’s leverage from 3.4× to 7.8×.

True Move launched the debt tender and consent offer with fixed prices on September 8 and this was structured to ensure maximum investor participation.

The tender and consent of the 2013 and 2014 bonds were inter-conditional on each other, and both indentures were to be amended. The 2013 and 2014 bonds had traded as high as 109 and 108, respectively, and as low as 104 and 103 amid the market turmoil in the third quarter of 2011.

True Move offered a cash price of 107 plus an early bird offer of two points for both sets of bonds, if tendered by the early-bird deadline.

The bonds were priced at a premium to the cash prices of 105 and 106 at which the bonds were priced before the launch, but at a discount to the make whole prices of 124 and 127.

The final participation rate was 97.7% and the transaction was the largest Asian corporate high-yield tender ever.