Published on 8/30/2023 in the Prospect News Green Finance Daily and Prospect News High Yield Daily.
New Issue: Telefonica sells €750 million 6¾% perpetual green subordinated reset securities
By Wendy Van Sickle
Columbus, Ohio, Aug. 30 – Telefonica, SA announced pricing of a €750 million issue of Telefonica Europe BV 6¾% green deeply subordinated guaranteed fixed-rate reset securities (Ba2/BB/BB+) on Wednesday at par, according to a 6-K filing with the Securities and Exchange Commission and information provided by a market source involved in the deal.
The notes priced at mid-swaps plus 361.5 basis points. Initial talk had the notes coming in the 7 1/8% area.
The securities are non-callable for eight years. There is a make-whole call option before the par call starts at 50 bps over the reference security.
The notes will bear interest at the fixed 6¾% rate until Sept. 7, 2031 when the rate will transition to the eight-year swap rate plus a margin of 361.5 basis points until Sept. 7, 2033, stepping up to 386.5 bps until Sept. 7, 2051 when it will step up again to 461.5 bps.
BNP Paribas (billing and delivery), Banco Sabadell, Barclays, CaixaBank, Crédit Agricole CIB, Mizuho, Morgan Stanley, Natixis, SMBC and UniCredit were the joint bookrunners.
An amount equal to the proceeds will be subject to specific eligibility criteria to be applied to finance new projects or refinance existing projects as detailed in Telefonica’s sustainable development goals framework.
Telefonica is a Madrid-based telecom.
| Issuer: | Telefonica Europe BV
|
| Guarantor: | Telefonica, SA
|
| Amount: | €750 million
|
| Issue: | Green deeply subordinated guaranteed fixed-rate reset securities
|
| Maturity: | Perpetual
|
| Bookrunners: | BNP Paribas (billing and delivery), Banco Sabadell, Barclays, CaixaBank, Crédit Agricole CIB, Mizuho, Morgan Stanley, Natixis, SMBC and UniCredit
|
| Coupon: | 6¾% initially, swap rate plus 361.5 bps starting Sept. 7, 2031, then swap rate plus 386.5 bps starting Sept. 7, 2033, then swap rate plus 461.5 bps starting Sept. 7, 2051
|
| Price: | Par
|
| Yield: | 6 ¾%
|
| Spread: | Mid-swaps plus 361.5 bps
|
| Call features: | Make-whole call at any time excluding par call times at reference security plus 50 bps; three-month par call before first reset date, starting June 7, 2031; any interest payment date thereafter
|
| First call date: | Sept. 7, 2031
|
| Trade date: | Aug. 30
|
| Settlement date: | Sept. 7
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| Ratings: | Moody’s: Ba2
|
| S&P: BB
|
| Fitch: BB+
|
| Distribution: | Regulation S
|
| ISIN: | XS2646608401
|
| Price talk: | 7 1/8% area
|
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