Telecom Italia begins any and all tender for dollar notes, capped offer for five euro series

By Susanna Moon

Chicago, July 7 – Telecom Italia SpA said it began a tender offer for the $1 billion 6.999% guaranteed senior notes due 2018 and $1 billion 7.175% guaranteed senior notes due 2019, each issued by Telecom Capital SA.

The tender offer will end at 5 p.m. ET on July 15.

Pricing will be set at 11 a.m. ET on July 15 using a yield to maturity of a reference security plus a fixed spread as follows:

• The 6.999% notes will price using the 1.125% U.S. Treasury note due June 15, 2018 plus 170 basis points; and

• The 7.175% notes will price using the 1.625% U.S. Treasury note due June 30, 2020 plus 160 bps.

As part of the company’s liability management, the tender offer is aimed at optimizing the company’s cost of debt and also at providing liquidity to noteholders, according to a company press release.

The company also will pay accrued interest up to but excluding the settlement date of July 20.

The global coordinator and structuring adviser is Citigroup Global Markets Ltd. (+44 20 79868969, 800 558-3745, 212 723-6106 or liabilitymanagement.europe@citi.com).

The dealer managers are Banco Bilbao Vizcaya Argentaria, SA (+44 207 648 7516, 212 728-1705 or liabilitymanagement@bbva.com), BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com), Citigroup Global Markets Ltd. (+44 20 79868969, 800 558-3745, 212 723-6106 or liabilitymanagement.europe@citi.com), Credit Agricole Securities (USA) Inc. (866 807-6030, +44 0 20 7214 7440 or liability.management@ca-cib.com), J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424) and Societe Generale (+44 20 7676 7579 or liability.management@sgcib.com).

The depositary and information agent is Global Bondholder Services Corp. (fax 212 430-3775 and confirm at 212 430-3774).

Euro notes

Concurrently, the company also began a tender offer for some of its euro-denominated securities, with the repurchase amount equal to €1.5 billion less the euro equivalent of the amount repurchased in the first offer.

In the euro offer, the company is tendering for the following notes with pricing to be set at 8 a.m. ET on July 16 using an interpolated mid-swap rate plus a spread:

• €1 billion (€625,692,000 outstanding) 7% notes due Jan. 20, 2017 will price using January 2017 notes interpolated mid-swap rate plus 60 bps;

• €1 billion (€736,026,000 outstanding) 4½% notes due Sept. 20, 2017 will price using September 2017 notes interpolated mid-swap rate plus 90 bps;

• €750 million (€714,121,000 outstanding) 4Ύ% notes due May 25, 2018 will price using May 2018 notes interpolated mid-swap rate plus 115 bps;

• €750 million (€628,986,000 outstanding) 6 1/8% notes due Dec. 14, 2018 will price using December 2018 notes interpolated mid-swap rate plus 120 bps; and

• €1.25 billion (€942,400,000 outstanding) 5 3/8% notes due Jan. 29, 2019 will price using January 2019 notes interpolated mid-swap rate plus 130 bps.

The company reserves the right to increase or decrease the maximum purchase amount according to a separate company notice.

Tender instructions must be submitted for a minimum nominal amount of notes of at least €100,000 and in integral multiples of €1,000 after that, except for the 5 3/8% notes, which must be submitted in multiples of €100,000.

The tender offer will end at 11 a.m. ET on July 15, with settlement set for July 20.

The global coordinator and structuring adviser is Citigroup Global Markets Ltd. (+44 20 7986 8969 or liabilitymanagement.europe@citi.com).

The dealer managers are Banco Bilbao Vizcaya Argentaria, SA (+44 207 648 7516 or liabilitymanagement@bbva.com), BNP Paribas (+44 20 7595 8668 or liability.management@bnpparibas.com), Citigroup Global Markets Ltd. (+44 20 79868969 or liabilitymanagement.europe@citi.com), Credit Agricole Securities (USA) Inc. (+44 207 214 7440 or liability.management@ca-cib.com), J.P. Morgan Securities LLC (+44 0 207 134 3438 or emea_lm@jpmorgan.com) and Societe Generale (+44 20 7676 7579 or liability.management@sgcib.com).

The tender agent is Lucid Issuer Services Limited. +44 0 20 7704 0880 or telecomitalia@lucid-is.com).

Telecom Italia is a Rome-based telecommunications company.

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