Home' Trinidad and Tobago Guardian : May 11th 2014 Contents MAY 11 • 2014 www.guardian.co.tt SUNDAY BUSINESS GUARDIAN
NEWS | SBG7
Cable & Wireless Communication's (CWC)
new chief executive Phil Bentley has con-
firmed that the company---which is a 49 per
cent shareholder in majority state-owned
TSTT---did put in a bid for a third mobile
Asked by e-mail to confirm if CWC did,
in fact, apply for a third mobile licence, Bent-
ley replied: "Yes, we did. We've always said
we want to invest in Trinidad and that we
have to explore all options of doing so."
In the last Sunday BG (May 4), Bentley
hinted that CWC may apply for a third
mobile licence, though not specifying this
Asked to comment on how CWC's appli-
cation for a third mobile operator license
would impact on the operational relationship
between TSTT & CWC, TSTT's acting CEO
Rakesh Goswami said: "TSTT's management
has not been informed by TATT of any of
the applicants that have expressed an interest
in being the country's third mobile provider.
"As far as we are concerned, CWC is still
a 49 per cent shareholder of TSTT and, as
such, is a sponsor of TSTT's five-year strate-
gic plan which includes decisions on mobile
"If CWC has, in fact, submitted a response
to Telecommunications Authority of T&T's
(TATT) invitation for a third mobile provider,
this would best be a matter for TATT to
TSTT is one of the member companies of
National Enterprises Ltd, which is listed in
the T&T Stock Exchange.
In a release on May 2, the TATT stated,
"six bid responses were received in response
to its request for proposals (RFP) for the
provision of enhanced data services in T&T."
TATT did not release the names of the
Tenders closed on Wednesday, April 30,
2014, and were opened in the presence of
bidders who exercised the option to be pres-
ent, TATT said.
The initial closing date of the RFP had
been extended from December 13, 2013 to
April 30, 2014, "to allow potential bidders
time to complete their submissions," TATT
The RFP is intended to attract providers
of enhanced mobile data services via "the
provision of a public domestic mobile
telecommunications network and public
telecommunications services by a potential
third mobile operator; the award of the 800
megahertz (Mhz) and 1900 Mhz spectrum
to eligible mobile operator(s); and the award
of the 700 Mhz spectrum to mobile oper-
TATT said it expects to complete the tender
evaluation process "in three to four months."
There are currently only two legal mobile
telephone operators in T&T: Denis O'Brien's
Digicel and TSTT.
When asked if Digicel had planned to bid,
via e-mail, Digicel spokesperson Penny
Gomez had said last year before the tender
closed: "As with any progressive organisation,
we will be assessing the request for pro-
posals' from the Telecommunications
Authority of T&T to see if there are any pru-
dent business opportunities we can take
bid for third
From Page 3
Q: Does TCL need the agreement of
the existing holders of the debt to issue
"senior secured first lien notes"?
A: TCL does not need to permission of
the existing debt holders to refinance the
existing debt. We can repay the debt without
penalty at any time.
How much of the US$325 million will
be issued to T&T investors and how
much to US/Canadian investors?
The original plan was to issue US$250
million to North American investors (US
and Canadian) and US$75 million to T&T
investors. This distribution may shift
depending on demand in both markets.
What is your estimate of the interest
rate the notes would be issued at?
TCL received a rating from Fitch of B-
and a B rating from S&P both with a "stable
outlook". This suggests that we will be able
to refinance the existing debt below the 10
per cent that we current pay, but the final
coupon will depend on the dynamics of the
US bond markets over the next few weeks.
The coupon is a reflection of the size of the
offer (the bigger the better), the rating and
the degree to which we are classified as an
organisation operating in emerging markets.
While Trinidad (TCL's headquarters) is
an investment grade country, the rest of the
Caribbean has sovereign ratings that are
lower and the market will determine how
to mix these issues.
What, therefore, is your estimate of
the amount of money TCL will save
over seven years as a result of the
We will issue a statement to all share-
holders at the end of the exercise to explain
what the savings will be. We expect to have
lower interest rates but the most important
benefit is the absence of principal amorti-
sation over the next seven years. This will
improve TCL's cash flow by an estimate
$170 million per year and can be used to
improve EBITDA performance and restart
the pay of dividends at a modest level.
Assess the impact of the bond issue
on TCL s short and medium-term.
The bond issue is far more covenant-
friendly than the current arrangement of
the Override Agreement with existing
lenders. There are significant benefits for
cash flows and interest payments and this
flexibility will allow TCL to manage the refi-
nancing risk prior to 2021 when we aim to
have around US$200 million in debt to refi-
Why didn t TCL opt to go for an
international bond four years ago
instead of the high-priced, locally syn-
If the lenders had agreed to a formal
standstill agreement to allow the company
to explore other options then it would have
been possible. However in 2011 the banks
did not display an understanding of the sit-
uation that TCL found itself in and were
not prepared to be flexible.
What is the logic behind a seven year
Generally these notes have tenors of five
and seven years. We opted for the longer
tenor to allow ourselves time to manage the
refinancing risk and to have the time to
deleveraging the balance sheet.
Do the notes qualify for inclusion in
the statutory funds of local insurance
I believe they will once they are registered
with the SEC. This process should be com-
pleted by the time we launch the offer in
Trinidad next week.
Given the demand, particularly by
T&T-based insurance companies for
US-dollar investments, why not issue
all the US$325 million in T&T?
The fact that the bonds were offered on
the US market does not prevent T&T-insur-
ance based companies from buying the
bonds. The issue is being offered in both
jurisdictions and will be able to be traded
If the notes are a private placement
(which means 35 or less investors) why
a road show to New York (and one
As far as I am aware, the private placement
rule about "less than 50 investors" only
applies in Trinidad. We are meeting with
around six investors per day for one and a
half hours each and having luncheons with
The road show is being done in New York,
Boston, Toronto, Los Angeles, Minneapolis
and Cincinnati in order to interact with as
wide a cross section of sophisticated
investors as possible.
TCL is a "first time issuer" in the US
bond market and therefore the road show
has to be more rigorous as investors are not
familiar with the company nor with the
Caribbean for that matter.
The US$295 million replaces how
much of the existing debt?
All the existing debt.
Of the US$30 million balance, how
much goes to working capital and how
much to fees?
Fees are estimated at around US$10-12
The W is one of the more expensive
hotels in NYC. How do you think TCL
shareholders would feel about that?
A: (Typical small minded perspective)...
The logistical arrangements for the road
shows were planned by the underwriters
based on their experience with road shows
in the US bond market. While the W may
have expensive rooms, I certainly did not
My room was very small only with a TV
and a minibar overlooking the alley where
they store the dustbins. The dustbin col-
lection in the early morning woke me up
on both nights. I am certainly not on any
kind of "joy ride" as we have been working
for long hours starting early in the morning
and working into the evening.
The W is in the centre of the financial
sector and was chosen by the book runners
to ensure that we could keep the very tight
deadlines for appointments with investors
in the NY financial sector.
Up to US$12 mill fees for underwriters
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