TalkTalk Bonds Plummet as Debt Deadlines Approach

TalkTalk, the beleaguered telecoms company, is in a race against time to secure a new deal with its debt-holders as its bond prices hit a new low. The broadband provider’s bond was trading at a mere 66.25p in the pound on Friday, marking a nearly 9% decline in just one week.

This comes as TalkTalk negotiates a refinancing of its debts, which have surpassed the £1 billion mark. The company, which was taken private by its founder Sir Charles Dunstone in 2021, is particularly concerned about a £330 million revolving credit facility set to expire in November.

Without fresh investment by the end of this month, TalkTalk risks breaching its covenants. Additionally, a £685 million loan is due next February, with the associated bonds experiencing the recent decline. TalkTalk had initially planned to raise funds by selling a stake in its wholesale business, PlatformX, to Australian bank Macquarie.

However, last week it came to light that these negotiations had reached an impasse. As a result, the company has shifted its focus to striking a debt deal with lenders. In an effort to win support for a plan to extend repayment to 2027, Dunstone has proposed a £400 million package. This would consist of a £200 million capital injection from existing shareholders and an additional £200 million in assets pledged to the lenders.

James Smith, TalkTalk’s chief financial officer, stated, “Good progress has been made in recent days in discussions with our shareholders and lenders on refinancing the balance sheet and strengthening the group’s funding position. We are working towards a near-term agreement with those parties and expect to provide an update shortly.”

As the clock ticks down, all eyes are on TalkTalk to see if they can secure a deal that will ensure the company’s financial stability and future success.

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bond pricesCharles Dunstonedebt refinancingJames SmithTalkTalktelecoms