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Telefonica tenders for all 4.2% notes, capped amount of 5% notes
By Susanna Moon
Chicago, March 5 – Telefonica SA said it is tendering for any and all of its €704.8 million of outstanding €850 million undated five-year non-call deeply subordinated guaranteed fixed-rate reset securities with a current coupon of 4.2% (the 2019 notes).
The issuer is also tendering for a maximum amount of its €591.8 million of outstanding €750 million undated six-year non-call deeply subordinated guaranteed fixed-rate reset securities with a current coupon of 5% (the 2020 notes).
The purchase price will be €103,038 per €100,000 of the 2019 notes and €104,923 per €100,000 of the 2020 notes. Holders will also receive accrued interest up to but excluding the settlement date, which is expected to be no later than March 15.
The tender offers will end at 11 a.m. ET on March 12.
The tender offers are contingent on an issue of new euro-denominated undated six-year non-call deeply subordinated guaranteed fixed-rate reset securities.
The issuer proposes to accept notes up to a maximum principal amount equal to the principal amount of new notes issued.
The amount of 2020 notes to be accepted for purchase will be set by the issuer and will not exceed the difference between the principal amount of new notes and the principal amount outstanding of 2019 notes prior to the offers, according to a company news release.
Telefonica is holding the offers “to proactively manage the issuer’s layer of hybrid capital” as well as to provide holders “with the opportunity to switch into the new notes ahead of upcoming first call dates,” according to the news release.
The first reset date is April 12, 2019 for the 2019 notes and March 31, 2020 for the 2020 notes.
The telecommunications group is based in Madrid.
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