Telefonica begins tender offers for two series of notes due 2023

By Marisa Wong

Los Angeles, Nov. 14 – Telefonica Europe BV launched separate invitations to holders of its €1 billion undated 5.5-year non-call deeply subordinated guaranteed fixed-rate reset securities (ISIN: XS1731823255) with a first call date of March 7, 2023 and €1.25 billion undated 5.7-year non-call deeply subordinated guaranteed fixed-rate reset securities (ISIN: XS1795406575) with a first call date of Sept. 4, 2023, both guaranteed by Telefonica, SA, to tender their notes for purchase for cash.

There is €676.4 million principal amount outstanding under the March 2023 series and €823.6 million principal amount outstanding under the September 2023 series.

Telefonica is offering a purchase price per €100,000 principal amount of €100,000 for the March 2023 series and €98,250 for the September 2023 series.

The March 2023 series has priority in acceptance over the September 2023 series.

The issuer will accept any and all tendered March 2023 securities and up to a maximum amount of the September 2023 securities.

Specifically, the cap on the September 2023 series will be equal to the difference between (i) the aggregate principal amount of new notes issued under a concurrent offering and (ii) the aggregate principal amount outstanding of the March 2023 notes prior to the tender offer.

If the maximum amount is exceeded, September 2023 securities may be accepted on a pro rata basis.

The issuer intends to issue new euro-denominated undated six-year non-call deeply subordinated guaranteed fixed-rate reset securities guaranteed by Telefonica. The tender offers are conditioned on the issuance of the new notes.

The tender offers will expire at 11 a.m. ET on Nov. 21.

Results will be announced on Nov. 22.

Settlement is slated for Nov. 24.

The company said the purpose of the offers is, among other things, to proactively manage its layer of hybrid capital. The offers also give holders the opportunity to switch into the new notes ahead of upcoming first call dates.

Telefonica is a Madrid-based telecom.

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