Silknet, Georgia's largest telecommunications provider, plans to issue $300 million in five-year Eurobonds on January 31.

It stated that the interest rate is 8.375%, and the coupon will be sent twice a year to the holders. The net proceeds of the sale will be used to refinance the company's current loans and borrowings, including the redemption of its outstanding 11% notes due April 2024, as well as for corporate purposes.

Silknet is launching its second foreign bond offering, following a $200 million sale in 2019. J.P. Morgan Securities plc and UBS AG London Branch are the bookrunners and joint lead managers for the offering, with TBC Capital LLC serving as a joint lead manager.

The sale has already attracted several high-quality institutional investors from around the world, according to Silknet.

Silknet's new Eurobonds are competitive at the regional level, according to TBC Capital, with an interest rate of 8.375%.

Silknet's negative rating outlook has been upgraded to stable by worldwide rating agency Moody's, based on the company's improved profitability and liquidity.

The new bond's credit rating is expected to be "B" according to the Fitch rating agency.

"The proceeds from the debt offering will be used to refinance the company's existing $200 million Eurobond due in 2024 and lari-denominated bonds due in 2022, as well as support shareholder dividends and other business objectives," Fitch said in a statement.

"Silknet will be able to repay part of the new bonds soon after they are issued."

Silknet, the country's second-largest telecommunications business, is owned by the Silk Road Group, an investment firm. In Georgia, the firm has 1.72 million mobile members and 197,000 fixed subscribers as of September 2021. The company's internet service has 293,000 users, while the TV service has 226,000 subscribers. For the first nine months of 2021, the firm earned $306.4 million in sales. Moody's has Silknet rated B1/Stable, while Fitch Ratings has it rated B/Stable.

Silknet became a diversified telecom services provider and more than quadrupled its revenue and EBITDA after acquiring Geocell, Georgia's second-largest mobile operator, in 2018.

"However, the firm's tiny size in absolute terms remains a strategic vulnerability." Fitch expected the company's EBITDA to be about $61 million in 2021.