Altice Creditors Sue as LSEG Shares Fall on Octus Talks
On Tuesday, creditors of Altice International sued the telecom group and several linked entities, saying assets worth billions of dollars were moved out of their reach. London Stock Exchange Group shares fell nearly 5 percent after the firm confirmed talks to buy credit data group Octus for $3.5 billion. Income investors now have a collateral fight in telecom credit and a valuation fight in market data, while US and UK government bond yields sit above 5 percent.
Creditors open a new case against Altice
Elliott Management, Sona Asset Management, and Arini Capital Management filed the case. They say they are owed EUR 8 billion. The filing says assets worth billions of dollars should still be available to repay that debt. After the transfers, the creditors say, those assets sit beyond their reach and benefit the controlling owner.
A second front opened two weeks earlier. Lenders to the US telecom business, including Apollo and Oaktree, argued the controlling owner was personally liable for a plan to move valuable assets away from bondholders.
Altice has sued as well. In November the company accused a US bondholder group of forming an illegal cartel by bargaining as one bloc. Bondholders denied that and sought dismissal. Creditors believed Kirkland and Ellis helped shape the claim, and the firm later stepped down as counsel.
France already has a deal on paper. In June the owner agreed to sell SFR, the French telecom arm, for EUR 20.35 billion, after creditors of parent Altice France cut debt from EUR 24 billion to EUR 15.5 billion. Altice USA and Altice International do not have an equivalent agreement. The new lawsuits say nobody is waiting on a settlement.
LSEG weighs $3.5 billion for Octus
London Stock Exchange Group is in talks to buy Octus for $3.5 billion. Octus, formerly Reorg, sells information on credit markets, distressed debt, and bankruptcies. LSEG confirmed the talks and said nothing is decided. The firm cited a leading position in private credit, including debt that rarely trades, and called that corner of the market fast growing.
Private capital is about $24 trillion. Managers want files on assets that do not print a public price. BlackRock paid GBP 2.55 billion last year for Preqin. LSEG made a similar turn in 2019, when the GBP 22 billion Refinitiv deal turned the exchange operator into a data business.
Shares fell nearly 5 percent on Tuesday once the talks were public. Permira, which owns Octus, first invested near a $1.3 billion value. A $3.5 billion sale would be a large markup for that owner and a large check for LSEG shareholders. If clients cut those data budgets, the price will look high.
A UK budget plan meets a 5.44 percent yield
The UK chancellor is expected to fund this month’s Budget giveaways, including a cost of living package, with higher taxes or spending cuts rather than extra borrowing. That matches an IMF recommendation.
The UK already pays up to borrow. Early Wednesday the 10 year yield was 5.439 percent, down 0.014 on the day. The US 10 year was 5.215 percent. The German bund was flat at 3.463 percent. The Japanese 10 year was 3.016 percent. Sterling stood at $1.3267.
Skipping new borrowing is the friendlier path for gilt prices. More issuance would add supply in a market that already yields more than Treasuries. Tax rises and spending cuts can slow growth. They do not add bonds. UK paper still pays a clear premium over the bund.
Brent sits at $106 after an Aramco attack
Brent crude rose 0.56 percent to $106.28. WTI rose 0.54 percent to $94.65. Gold was unchanged at $4,152.90.
Houthi forces appeared to strike Saudi Aramco headquarters in Dhahran after a Saudi coalition hit Sanaa. The site was reported on fire. Strikes this month have already tested Saudi air defenses, even after spending counted in the billions of dollars.
Stock indexes barely moved. The S&P 500 slipped 0.02 percent to 7,805. The Nasdaq 100 fell 0.31 percent to 30,569. The FTSE 100 eased 0.06 percent to 10,650. The Nikkei 225 rose 0.79 percent to 68,310, and the Hang Seng added 0.16 percent to 24,385.
Brent above $100 supports cash at integrated oil producers, and it makes a quick fall in inflation less likely.
Bank of America draws a fine above $1 billion
The US Treasury fined Bank of America more than $1 billion for money laundering and sanctions failures. The same penalty has also been put at $1.2 billion. The bank did not properly report more than $5 billion in suspicious transactions.
Bank of America reports earnings the same day as BlackRock and Morgan Stanley. A fine of that size shows up in a quarter. Legal costs are cash that does not become a dividend. One penalty can be absorbed. Repeated sanctions cases are what lead a board to pause buybacks and hold the payout flat.
What this means for income investors
Telecom credit is a collateral problem before it is a yield problem. Altice France cut debt from EUR 24 billion to EUR 15.5 billion and agreed a EUR 20.35 billion sale of SFR. Creditors of Altice International say EUR 8 billion still depends on assets they claim were moved. The coupon does not repair that.
LSEG is a lesson about price. Private capital of about $24 trillion is hard to monitor, and Octus sells the files that describe it. Shareholders marked the stock down nearly 5 percent on a $3.5 billion price against a Permira entry near $1.3 billion. Useful files can still cost too much.
Cash yields set the bar. A UK 10 year at 5.439 percent and a US 10 year at 5.215 percent are what a dividend or a credit spread has to clear. A Budget that skips extra borrowing supports gilt holders. Brent at $106.28 works against them if it keeps inflation high.