**Altice International’s Bonds Experience Historic Drop Following Asset Shift**
**Meta Description:** Altice International’s bonds plummet after the company reclassifies key assets, raising concerns among creditors and impacting financial stability.
**URL Slug:** altice-international-bonds-drop-asset-shift
**Headline:** Altice International Faces Record Bond Decline After Strategic Asset Reclassification
Altice International’s bonds suffered their largest decline on record this past Monday, following a significant announcement made on Friday. The telecommunications company revealed it had reclassified certain assets, effectively shielding them from creditors in a bold attempt to stabilize its financial situation.
The euro-denominated first-lien notes, set to mature in August 2029, fell by as much as 9 cents to 66, according to market data. In a more severe downturn, the second-lien bonds maturing in January 2028 dropped over 16 cents on the euro, reaching a low of 19, marking their steepest intraday decline since they were issued.
Founded by Patrick Drahi, Altice International disclosed late Friday that it had designated Altice Portugal SA, which oversees its operations in Portugal, and Altice Caribbean Sarl, responsible for its activities in the Dominican Republic, as “unrestricted subsidiaries.” This classification allows these entities to operate outside the constraints of existing credit agreements, enabling them to incur debt, sell assets, or distribute dividends without lender approval.
In a notable move, one division of Altice Portugal has already secured €750 million ($872 million) in new debt to address upcoming liabilities for Altice International and to support general working capital needs. This strategy, referred to in credit markets as a “drop-down,” has left the restricted group primarily with Altice’s operations in Israel.
Creditsights analysts, led by Mark Chapman, commented on the situation, stating, “Altice gave creditors a cruel post-Thanksgiving gut-punch on Friday after market close, announcing it had shifted assets contributing 80% of the last-twelve-month EBITDA out of the restricted group.” They further noted that Drahi appears to hold significant leverage in the situation, leaving creditors in a vulnerable position with limited options for recourse.
Additionally, the company indicated the potential to raise €2 billion in further debt at the Altice Portugal level, which could enhance its liquidity position moving forward.
In conclusion, Altice International’s recent asset reclassification has raised alarms among creditors and led to a historic drop in bond values. The company’s strategic moves may provide short-term relief but also highlight the precarious nature of its financial standing.
**FAQ Section:**
**Q: What does the reclassification of assets mean for Altice International’s creditors?**
A: The reclassification allows Altice to operate certain subsidiaries without adhering to existing credit agreements, potentially limiting creditors’ ability to recover debts as these assets are now shielded from their claims.
