RCS & RDS’s €850 Million Landmark High-Yield Offering

Cleary Gottlieb represented Citigroup, ING, and UniCredit Bank, as initial purchasers, in a landmark offering of two tranches of senior secured high-yield notes by RCS & RDS S.A. (RCS & RDS), the first-ever high-yield issuances by a Romanian issuer.

The offering was accompanied by a series of novel and innovative structural features designed to mitigate potential concerns that certain provisions of Romanian law providing for the possibility of noteholders’ meetings (adunarea obligatarilor) and noteholders’ representatives (reprezentantul obligatarilor) might interfere with the customary exercise or performance of rights, duties, powers, authorities, or discretions under customary high-yield notes documentation.

The notes, which comprise a €450 million tranche of 2.5% senior secured notes due 2025 and a €400 million tranche of 3.25% senior secured notes due 2028, are guaranteed by Digi Communications N.V. (the Dutch parent company) as well as the group’s key Hungarian and Spanish subsidiaries and secured on a first-ranking basis by security interests in most RCS & RDS movable assets and by share pledges over the group’s equity interests in RCS & RDS and the various subsidiary guarantors.

The transaction launched on January 27, 2020, priced on January 29, 2020, and settled on February 5, 2020. The notes are expected to be listed on the Official List of Euronext Dublin and admitted to trading on the Main Securities Market thereof.

RCS & RDS is the principal operating subsidiary of Digi Communications, which, through its subsidiaries, is a leading provider of telecommunication services in Romania and Hungary, has significant operations in Spain, and is also present in Italy.