Telecom Italia begins tendering for €500 million of four note series

By Susanna Moon

Chicago, March 7 - Telecom Italia SpA said it began tender offers for up to €500 million of four series of its notes:

• €750 million 4¾% notes due 2014 with €556.8 million outstanding;

• €750 million 4 5/8% notes due 2015;

• €1 billion 5 1/8% notes due January 2016; and

• €850 million 8¼% notes due March 2016 with a sub-cap of €125 million.

The purchase price for the 4¾% notes will be 100.7, or €50,350 for each €50,000 par amount.

Pricing will be set at 5 a.m. ET on March 14 using the interpolated mid-swap rate plus 65 basis points for the 4 5/8% notes, plus 105 bps for the 5 1/8% notes and plus a maximum spread of 130 bps for the 8¼% notes with the exact rate to be set using a modified Dutch auction.

The company also will pay accrued interest.

The tender offers will end at 11 a.m. ET on March 13 with settlement set for March 18.

Tender instructions must be submitted with a minimum nominal amount of at least €100,000 for the 4 5/8% notes and of at least €50,000 for the other series, and they may be submitted in integral multiples of €1,000 after that.

The dealers managers are BNP Paribas (attn: liability management group, +44 0 20 7595 8668, liability.management@bnpparibas.com), Commerzbank Aktiengesellschaft (attn: liability management group, +49 69 136 59920, Liability.Management@Commerzbank.com) and UniCredit Bank AG (attn: debt capital markets, Italy; liability management, +39 02 8862 0581, +49 89 378 17425, dcmitaly@unicredit.eu; corporate.lm@unicredit.de).

The tender agent is Citibank NA, London Branch (+44 0 20 7508 3867, attn: exchange team - agency and trust, exchange.gats@citi.com).

The offers are part of the company's balance sheet management and are aimed at proactively managing its forthcoming debt maturities, and the offers also provide a degree of liquidity to noteholders, according to a press release by the Rome-based telecom.

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