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SUNCOM’s IPO Will Eventually Happen

14 January 2015 by lberuti

As you can see on the above Grapple, it is not the first time SUNCOM’s (Sunrise Communications) IPO is rumoured in the market: Except that this time, it will actually happen. The second largest telecom carrier in Switzerland plans a public listing in the first half of the year. Considering competition in the Swiss mobile market will likely increase following the acquisition of Orange Switzerland by Xavier Niel, the move by CVC to monetise some of the investment it made in 2010 is not that surprising. The proceeds of the IPO should amount to CHF1.35bln and will enable Sunrise to deleverage its balance sheet and reduce the cost of debt. Combine with a reduction in capex to more normal levels following a few years of heavy investment, this will allow the company ?to implement an attractive and sustainable shareholder distribution policy?, it said. If all goes according to plan, the only bond left should eventually be CHF370m of secured notes maturing in 2017 and callable at 101.406 from 31 July 2015. Investors considered that this story has ?orphaning? written all over it with regards to SUNCOM’s CDS, and they sent it 83bps tighter.