Altice raises funds to buy Cablevision

PARIS: French-Israeli media magnate Patrick Drahi has wrapped up the financing needed to buy US cable operator Cablevision despite difficult market conditions, taking the debt of his Altice group up to 45 billion euros ($50.3 billion).
Altice said Thursday it raised 1.6 billion euros in capital from institutional investors and emitting more than 8.0 billion euros in new debt.
That debt placement, plus $5.9 billion of debt it is taking on from Cablevision, is expected to complete the $14.5 billion of debt financing for the $17.7 billion deal announced last month.
The acquisition of Cablevision, which is present in the lucrative New York market, will take Altice to fourth place in the US cable market thanks to the purchase of another operator earlier this year.
The debt placement, announced last week, had sparked concerns that the company could be forced to pay higher interest rates given its current debt level and the volatility on global markets.
"The company´s bonds and shares have been under pressure in recent days," analysts at Aurel BGC brokerage said.
Altice´s Amsterdam-quoted shares have lost about 17 percent of their value in the past five days.
An analysis of Altice published by investment bank Goldman Sachs had warned of tensions on the high-yield corporate debt market, which was making it harder for companies to raise cash.
However, a source close to the group said Thursday it had secured long-term financing.
While Goldman Sachs was optimistic about Altice´s ability to pay back its debt quickly, analyst Tariq Ashraf at BearingPoint warned cable companies were overvalued.
"There is a robust strategic model and confidence in the capacity of Mr Drahi ... to generate cash," Ashraf told AFP. "But that is partly tied to market conditions and that is a lever you don´t control."