Macquarie-owned broadcast transmission provider Arqiva is exploring options to refinance its 3.4 billion pounds ($5.3 billion) of debt raised when Macquarie acquired National Grid Wireless in 2007, sources said on Thursday.
Early stage discussions are being held between Macquarie, Arqiva and a few banks on how to refinance the debt, some of which matures as early as 2014, the sources said.
The deal would be the largest western European non-investment grade refinancing since German automotive group Schaeffler's $6.6 billion refinancing in February 2012, according to Thomson Reuters LPC data.
Arqiva's debt - a hybrid infrastructure, leveraged loan deal - was put in place in 2007 to back Macquarie's 2.5 billion pound buyout of NGW from National Grid and refinance Arqiva's debt, formerly known as NTL Towers.
Macquarie is now exploring which investor base to access in order to refinance the large deal as the original hybrid structure, a product of the boom-time era, is not available anymore.
"The deal was done in 2007 at the peak of the market and is a mix of infrastructure and leveraged debt. The good syndication market only existed at that point in time, after that the structure fell away," a source said.
The leveraged loan, high-yield bond and structured credit markets will all be considered as ways to refinance the deal, the sources said.
Early stage talks are likely to continue for a couple of months before more formal steps are put in place.
Arqiva and Macquarie were not immediately avaliable to comment.
Arqiva has revenues of over 800 million pounds per annum and employs more than 2,000 people, according to its website.
Its major customers include the BBC, ITV, Channel 4, Five, BSkyB, Discovery, CNN, ESPN, Vodafone, O2, Orange, T-Mobile, mobile provider 3 and the emergency services.
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