Telecom Italia to buy €979.84 million notes in euro, dollar tender

New York, July 17 – Telecom Italia SpA set the maximum tender amount in its offer to buy euro- and dollar-denominated notes at €979,842,956.

The company will accept all the notes submitted for purchase in the offers, according to a company announcement.

When it announced the offers, Telecom Italia said it would buy all the dollar-denominated notes and €1.5 billion of the euro notes less the euro equivalent of the amount purchased in the dollar offer.

As of the expiration of the euro offer on 11 a.m. ET on July 15, the response was as follows:

• €81,141,000 of the €625,692,000 outstanding 7% notes due Jan. 20, 2017. The purchase price is €1,094.20 per €1,000 principal amount, set using a spread of 60 basis points over interpolated mid-swaps;

• €107,811,000 of the €736,026,000 outstanding 4½% notes due Sept. 20, 2017. The purchase price is €1,074.28 per €1,000 principal amount, set using a spread of 90 bps over interpolated mid-swaps;

• €121,223,000 of the €714,121,000 outstanding 4¾% notes due May 25, 2018. The purchase price is €1,094.77 per €1,000 principal amount, set using a spread of 115 basis points over interpolated mid-swaps;

• €47,108,000 of the €628,986,000 outstanding 6 1/8% notes due Dec. 14, 2018. The purchase price is €1,153.95 per €1,000 principal amount, set using a spread of 120 basis points over interpolated mid-swaps; and

• €110 million of the €942.4 million outstanding 5 3/8% notes due Jan. 29, 2019. The purchase price is €1,129.60 per €1,000 principal amount, set using a spread of 130 basis points over interpolated mid-swaps.

All €467,283,000 of the euro notes that were tendered have been accepted.

As announced on July 7, pricing was set at 8 a.m. ET on July 16. Settlement will be July 20.

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 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 Ltd. (+44 0 20 7704 0880 or telecomitalia@lucid-is.com).

As announced on July 16, in the dollar offer investors tendered a total of $564,226,000 of the $1 billion 6.999% guaranteed senior notes due 2018 and the $1 billion 7.175% guaranteed senior notes due 2019 issued by Telecom Italia Capital SA.

The tendered amount includes $66,000 principal amount of 6.999% notes and $820,000 principal amount of 7.175% notes that remain subject to the guaranteed delivery procedures, according to a 6-K filing with the Securities and Exchange Commission.

The company expects to accept for purchase all of the tendered $323,356,000 of 6.999% notes and $240.87 million of 7.175% notes, with settlement set for July 20.

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

As previously announced, the payment for each $1,000 principal amount will be $1,117.21 for the 6.999% notes and $1,141.88 for the 7.175% notes.

Pricing was set using the sum of the yield to maturity for a reference Treasury security, based on the bid-side price as of 11 a.m. ET on July 15, plus a fixed spread.

For the 6.999% notes, the reference security was the 1.125% Treasury due June 15, 2018, which had a reference yield of 1.027%, and the fixed spread was 170 basis points.

For the 7.175% notes, the reference security was the 1.625% Treasury due June 30, 2020, which had a reference yield of 1.679%, and the fixed spread was 160 bps.

Holders will also receive accrued interest up to but excluding the payment date.

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. (212 430-3774).

Telecom Italia is a Milan-based telecommunications company.

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