Telefonica launches six-day tender offer for subordinated notes

By Mary-Katherine Stinson

Lexington, Ky., March 6 – Telefonica, SA’s wholly owned subsidiary Telefonica Europe BV launched a debt tender offer to purchase for cash its €1.3 billion undated six-year non-call deeply subordinated guaranteed fixed rate reset securities (ISIN: XS1933828433) guaranteed by Telefonica, according to a 6-K filing with the Securities and Exchange Commission.

The notes currently bear interest at 4¾% and have a first call date of Dec. 14, 2024.

The company is offering to purchase the notes at par plus accrued interest up to a maximum principal amount equal to a total principal amount of proposed new euro-denominated undated 8.1-year non-call deeply subordinated guaranteed fixed rate reset securities also guaranteed by Telefonica.

However, the issuer reserves the right to increase the maximum acceptance amount should a substantial purchase event occur and the issuer may or may not exercise its call right upon the occurrence of a substantial purchase event at any time following the offer.

Tenders may be subject to proration if the offer is oversubscribed.

The offer will expire at 11 a.m. ET on March 13.

The results will be announced around 4 a.m. ET on March 14, with settlement expected for March 18.

The purpose of the offer is to proactively manage Telefonica’s layer of hybrid capital while also providing noteholders with the opportunity to switch to the new notes ahead of the upcoming first call date.

Telefonica is a telecommunications company based in Madrid.

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