Chicago, June 1 – Vodafone Group plc sold a three-part offering of deeply subordinated capital securities (Ba1/BB+/BB+), all due June 4, 2081, according to an FWP filing with the Securities and Exchange Commission on Tuesday.
The securities are only senior relative to ordinary shares.
The chief differences between the tranches are the initial coupons, reset interest rate terms and call dates.
Tranche 1
The first $500 million tranche sold with a 3¼% initial coupon at par, or a spread of 244.7 basis points over Treasuries.
Interest is payable semiannually.
The rate will reset on Sept. 4, 2026 and then ever fifth anniversary thereafter.
During the first reset date period, the rate will reset to Treasuries plus 244.7 bps.
Between Sept. 4, 2031 and Sept. 4, 2026, on each reset date the notes will calculated at Treasuries plus 269.7 bps.
After Sept. 4, 2046, the rate will reset at Treasuries plus 344.7 bps.
The tranche can first be called on June 4, 2026.
Tranche 2
The second tranche, for $1 billion, starts with a 4 1/8% interest rate.
The securities sold at par, or a spread of Treasuries plus 251.7 bps.
Interest is payable semiannually
The 4 1/8% rate converts to a step-up floating rate, with the first reset scheduled for June 4, 2031. Resets will occur at five-year intervals thereafter.
The rate will reset to the five-year Treasury rate plus 276.7 bps from the first reset date until June 4, 2051.
Starting on June 4, 2051, the rate will reset to Treasuries plus 351.7 bps.
The securities can be called starting March 4, 2031.
Tranche 3
A third $950 million of securities were sold with a 5 1/8% start rate, at par. The notes priced with a spread of Treasuries plus 282.3 bps.
The rate resets June 4, 2051 and every five years thereafter.
The rate will reset to the five-year Treasury rate plus 307.3 bps until 2071.
Starting on June 4, 2071, the rate will be Treasuries plus 382.3 bps.
The notes can be called for the first time on Dec. 4, 2050.
Additional details
Interest can be deferred at any time, in whole or in part, on a cash-cumulative and compounding basis.
All tranches can potentially be redeemed early with a make-whole premium, upon the occurrence of an accounting event, a tax event, a capital event or a withholding tax event.
Proceeds will be used for general corporate purposes, which may include funding repurchases of ordinary shares issued in connection with the £1.72 billion 1.5% subordinated mandatory convertible bonds due 2022.
Barclays, BofA Securities, Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Standard Chartered Bank are underwriters for the securities.
The telecommunications company is based in London.
| Issuer: | Vodafone Group plc
|
| Issue: | Deeply subordinated capital securities
|
| Amount: | $2.45 billion
|
| Maturity: | June 4, 2081
|
| Bookrunners: | Barclays, BofA Securities, Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC, Standard Chartered Bank
|
| Trustee: | Bank of New York Mellon, London Branch
|
| Change of control: | At 101
|
| Trade date: | June 1
|
| Settlement date: | June 4
|
| Ratings: | Moody’s: Ba1
|
| S&P: BB+
|
| Fitch: BB+
|
| Distribution: | SEC registered
|
|
|
| Tranche 1
|
| Amount: | $500 million
|
| Coupon: | 3¼% initial rate; resets to Treasuries plus 244.7 bps on Sept. 4, 2026; resets every five years; steps up to Treasuries plus 269.7 bps on Sept. 4, 2031; steps up to Treasuries plus 344.7 bps on Sept. 4, 2046
|
| Price: | Par
|
| Yield: | 3¼%
|
| Spread: | 244.7 bps
|
| Call features: | Make-whole call until June 4, 2026
|
|
|
| Tranche 2
|
| Amount: | $1 billion
|
| Coupon: | 4 1/8% initial rate; resets on June 4, 2031 to Treasuries plus 276.7 bps; resets every five years; resets at Treasuries plus 351.7 bps after June 4, 2051
|
| Price: | Par
|
| Yield: | 4 1/8%
|
| Spread: | Treasuries plus 251.7 bps
|
| Call features: | Make-whole call until March 4, 2031
|
|
|
| Tranche 3
|
| Amount: | $950 million
|
| Coupon: | 5 1/8% initial rate; resets to Treasuries plus 307.3 bps on June 4, 2051; resets every five years; resets to Treasuries plus 382.3 bps after June 4, 2071
|
| Price: | Par
|
| Yield: | 5 1/8%
|
| Spread: | 282.3 bps
|
| Call features: | Make-whole call until Dec. 4, 2050
|
|
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