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Telefonica Europe launches tender offer for 5 7/8% perpetuals, sets cap at 387.6 million
By Marisa Wong
Los Angeles, Aug. 30 Telefonica Europe BV is inviting holders of its outstanding undated 10-year non-call deeply subordinated guaranteed fixed-rate reset securities (ISIN: XS1050461034) guaranteed by Telefonica, SA to tender their notes for purchase for cash, up to a maximum aggregate principal amount, according to a Wednesday press release.
Of the 1 billion original principal amount, 387.6 million is outstanding. The current coupon for the notes is 5 7/8%.
The maximum acceptance amount is equal to (a) the aggregate principal amount of new notes to be issued under a concurrent offering less (b) 362.4 billion, which is the aggregate principal amount outstanding as of Aug. 30 of the companys 1.25 billion undated 5.7-year non-call deeply subordinated guaranteed fixed-rate reset securities (ISIN: XS1795406575).
In a later announcement on Wednesday, the issuer said the indicative maximum acceptance amount is 387.6 million.
The company separately announced that it has priced 750 million of new notes.
The issuer noted in the earlier news release that it reserves the right to increase the maximum acceptance amount should a substantial purchase event occur in respect of the existing 5 7/8% notes, and the issuer may or may not exercise its call right upon the occurrence of a substantial purchase event under the conditions of the notes at any time following the tender offer.
The issuer is offering to purchase the securities at 101,100 per 100,000 principal amount.
The company will also pay accrued interest.
Tendered notes may be subject to proration. Tender instructions may not be withdrawn except in limited circumstances.
The offer will expire at 11 a.m. ET on Sept. 5.
Tender results and the final acceptance amount will be announced together.
Settlement is expected to be on Sept. 8.
The tender offer is conditioned on settlement of the new issuance.
Holders who participate in the tender offer and wish to subscribe for the new notes may be given priority in allocation of the new notes.
The company said the purpose of the offer is, among other things, to proactively manage its layer of hybrid capital. The offer also gives holders an opportunity to switch into the new notes ahead of the upcoming first call date for the existing notes, which is on March 31, 2024.
Telefonica is a Madrid-based telecom.
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