Joint roadshows for a prospective $900 million Nasdaq-listed equity offering and $400 million high yield debt transaction have been provisionally scheduled to begin on September 11. Goldman Sachs and Salomon Smith Barney are joint bookrunners for the former, Chase Manhattan and Merrill Lynch joint bookrunners for the latter.
The company, which was formed last November as a joint venture between Global Crossing of the US, Microsoft and Softbank, had originally intended to launch its deal just prior to the summer break. However, it decided to pull back at the last minute after receiving "comments" from its SEC filing which would have led it to miss the slim market window it had been aiming for.
Indicative pricing for the equity offering has been pitched at $14 to $16, with a total of 53 million class A common shares on offer and an additional 7.95 million greenshoe.
The debt portion of the deal will comprise a 10 year transaction with a likely rating in the low BB or high single B range. The most obvious pricing benchmark will be the debt of BB+ Global Crossing, which has numerous outstanding lines and is consequently extremely well known among the US high yield investor base which will also be targeted for Asia Global.
A $1.1 billion transaction due 2009, for example, is trading around the 360bp level over Treasuries. Taking into account a likely two to three notch rating differential between the two and the Asian premium which international investors still demand on any transaction from the region, specialists believe that Asia Global should price about 200bp wide of its parent.
The company announced this week that Microsoft and Softbank will together pay $307.8 million for a 19% stake in Hutchison Global Crossing, owned by Global Crossing. Together with Global Crossing, which will be left with a 31% stake, the two companies intend to contribute their holdings to Asia Global in the form of capital.
Asia Global is hoping to become the region's first pan-Asian telecommunications carrier, providing integrated internet, data, voice and web-hosting services to wholesale and business customers. In addition to its 50% stake in Hutchison Global Crossing, the Hong Kong-headquartered company also owns 65% of Pacific Crossing-1, a fibre-optic subsea system connecting Japan and the US. It is also building East Asia Crossing, a 19,000 km fibre-optic subsea system interconnecting the whole Pacific Rim.
