Millicom (Tigo) announces proposed Offering of Senior Notes due 2032
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Insights
Millicom's announcement of a private offering of Senior Notes due 2032 is a strategic move aimed at restructuring its debt profile. By opting to repay the DNB Loans, the company is likely trying to manage its interest expenses and improve its balance sheet efficiency. From a financial perspective, the key factors to consider include the interest rates of the new notes compared to the DNB Loans and the potential impact on the company's credit rating.
Investors should pay attention to the terms of the notes, such as the yield, which will indicate the cost of capital for Millicom and influence its financial leverage. If the proceeds lead to lower interest expenses, this could improve net income and potentially enhance shareholder value. However, an increase in debt levels without a corresponding growth in profitability could raise concerns about long-term financial sustainability.
The offering's exemption from the registration requirements under the Securities Act of 1933 indicates a private placement aimed at qualified institutional buyers. This approach can expedite the capital-raising process and limit the disclosure requirements that a public offering would necessitate. However, the limitation to institutional buyers and the lack of registration with the SEC indicates that the notes will have less liquidity and might trade at a discount in secondary markets.
It's important for stakeholders to understand that the notes will not be readily available to the general public and that the legal framework governing these notes could affect their marketability. The absence of an offer or solicitation to the public also minimizes regulatory risk and streamlines the offering process.
When a telecommunications company like Millicom opts for a debt offering, market analysis suggests it's a move to leverage industry growth opportunities or to optimize capital structure. For peers in the industry, this may signal a trend towards debt financing over equity to avoid dilution of existing shareholders. The use of proceeds for general corporate purposes could indicate upcoming investments in network infrastructure, which is vital for staying competitive in the telecom sector.
On a broader scale, the telecom industry is capital-intensive and often requires significant investment to upgrade technology and expand services. Market trends towards 5G and improved connectivity solutions could be driving such financial decisions. Investors should consider how this debt issuance aligns with Millicom's growth strategy and industry trends.
Millicom (Tigo) announces proposed Offering of Senior Notes due 2032
Luxembourg, March 25, 2024 – Millicom International Cellular S.A. (“Millicom”) today announced that it is commencing a private offering of Senior Notes due 2032 (the “Notes”) that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).
Millicom expects to use a portion of the net proceeds from the issuance of the Notes to repay indebtedness outstanding under the DNB Loans (as defined below), with accrued interest. Millicom expects to use any remaining net proceeds from the issuance of the Notes for the repayment, redemption, retirement or repurchase of existing indebtedness of Millicom and its subsidiaries and for other general corporate purposes.
The DNB Loans consist of (i) a
The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act, and outside the United States, only to non-U.S. investors pursuant to Regulation S. The Notes will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. This press release is being issued pursuant to and in accordance with Rule 135c under the Securities Act.
Forward-looking statements
This press release contains forward-looking statements. Actual results may differ materially from those reflected in the forward-looking statements. We undertake no obligation to release publicly the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof, including, without limitation, changes in our business or acquisition strategy or planned capital expenditures, or to reflect the occurrence of unanticipated events.
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For further information, please contact
| Press: Sofía Corral, Communications Director press@millicom.com | Investors: Michel Morin, VP Investor Relations investors@millicom.com |
About Millicom
Millicom (NASDAQ U.S.: TIGO, Nasdaq Stockholm: TIGO_SDB) is a leading provider of fixed and mobile telecommunications services in Latin America. Through our TIGO® and Tigo Business® brands, we provide a wide range of digital services and products, including TIGO Money for mobile financial services, TIGO Sports for local entertainment, TIGO ONEtv for pay TV, high-speed data, voice, and business-to-business solutions such as cloud and security. As of December 31, 2023, Millicom, including its Honduras Joint Venture, employed approximately 16,500 people and provided mobile and fiber-cable services through its digital highways to more than 45 million customers, with a fiber-cable footprint over 13 million homes passed. Founded in 1990, Millicom International Cellular S.A. is headquartered in Luxembourg.
FAQ
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