Altice International - comment

The Company is taking a hard line in its negotiations with creditors, unwilling to engage with the cooperation block and instead requesting details of the constituents. The strategy is to divide and conquer by offering individual creditors the opportunity to uptier closer to the dropped-down assets. Ultimately, this will be a test of the strength of the co-op group. We expect legal challenges against the drop-down and the cooperation agreement to follow shortly. 

Investors are still trying to interpret last week’s developments, but are receiving no information from Altice International. The Company has not responded to the cooperation creditor group’s request for clarification on the designation of its Portugal and Dominican Republic units as unrestricted subsidiaries, nor has it provided details on the level of intercompany loans owed to Altice International. 

Meanwhile, it has been reported that Kirkland & Ellis is now advising the Company. Separately, S&P has downgraded both bonds by one notch, reflecting the expectation that a distressed exchange is imminent.