Incumbent Portugal Telecom priced a E600m five-year Eurobond yesterday to increase the flexibility of its financial resources for the years ahead.
A source close to the company told TelecomFinance that the issue was part of plans to develop a more…
Incumbent Portugal Telecom priced a E600m five-year Eurobond yesterday to increase the flexibility of its financial resources for the years ahead.
A source close to the company told TelecomFinance that the issue was part of plans to develop a more conservative balance sheet, meaning it “won’t need to go to the markets in coming years”.
The bond was issued through wholly-owned subsidiary PT International Finance, and comes with a 5.625% coupon at a reoffer level of 295bp above mid-swaps.
Bookrunners were Bank of America Merrill Lynch, Barclays Capital, BES Investimento, Caixa BI, Citigroup and Credit Suisse.
Announcing the issuance of the Eurobond yesterday, PT said: “This transaction is integrated in the financing strategy of PT, which aims at having diversified maturities and sources of financing. The proceeds will be used for general corporate purposes.”
The company revealed on Wednesday that it expects its acquisition of a minimum 22.38% direct and indirect stake in Oi to close in March this year. The deal includes PT making a R$12bn (US$7.2bn) capital increase in Oi subsidiaries Tele Norte Leste (TNL) and Telemar Norte Leste (TMAR).
Moody’s rates PT as Baa2/stable and S&P has assigned it a BBB/stable rating.
Meanwhile, the European Commission is investigating whether Telefonica and PT breached EU rules by agreeing to not compete in their respective home markets.
The arrangement was secured as part of the Spanish giant’s recent E7.5bn acquisition of PT’s 50% stake in Brasilcel, the holding company JV that owns a majority stake in the Brazilian telco Vivo.
The EC has insisted the Brazilian deal itself will not be affected by the probe.
