Telefonica Europe gives results of capped tender for three note series

By Rebecca Melvin

Concord, N.H., Nov. 23 – Telefonica Europe BV announced the final results of its Nov. 15 cash tender offer for hybrid notes from three series guaranteed by Telefonica, SA, according to a press release.

On Nov. 16, the company announced that up to €750 million of the notes would be accepted.

Telefonica Europe confirmed on Tuesday that it is accepting the indicative maximum acceptance amount divided among two series of notes, which had priority, and subject to proration, and none of the third series is being accepted. Specifically, the results are:

• €323.6 million undated 5.5-year non-call deeply subordinated guaranteed fixed-rate reset securities with a first call date on March 7, 2023 and current coupon of 2.625% (ISIN: XS1731823255) were accepted out of €708 million tendered, using a proration factor of 47.2%. The purchase price for the notes, of which there was €1 billion outstanding, is 102.640, based on the negative 0.452% benchmark rate and repurchase yield of 0.548%;

• €426.4 million undated 5.7-year non-call deeply subordinated guaranteed fixed-rate reset securities with a first call date on Sept. 4, 2023 and a current coupon of 3% (ISIN: XS1795406575) were accepted out of €1,060,100,000 tendered, using a proration factor of 41%. The purchase price for the notes, of which there was €1.25 billion outstanding, is 103.827, based on the benchmark rate of negative 0.379% and repurchase yield of 0.821%; and

• None of the €540.9 million tendered undated 10-year non-call deeply subordinated guaranteed fixed-rate reset securities with a first call date on March 31, 2024 and a current coupon of 5.875% (ISIN: XS1050461034) were accepted. There is €1 billion of the notes outstanding.

The two series with a first call date in 2023 had priority in acceptance over the third series with a first call date in 2024.

The offers remain subject to satisfaction (or waiver) of the new financing condition. Settlement is expected to occur on Nov. 25.

All the notes repurchased will be cancelled.

The purpose of the tender offer is, among other things, to manage the issuer’s hybrid capital and give noteholders the opportunity to switch into new notes ahead of upcoming first call dates.

The telecommunications group is based in Madrid.

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