Dutch telecoms operator Royal KPN has announced it has placed a €750m (US$996.6m) 10-year eurobond with a range of institutional investors.
The company said in a statement the bond, issued under KPN’s Global Medium Term Note programme, has a…
Dutch telecoms operator Royal KPN has announced it has placed a €750m (US$996.6m) 10-year eurobond with a range of institutional investors.
The company said in a statement the bond, issued under KPN’s Global Medium Term Note programme, has a coupon of 4.25% and will be listed on the NYSE Euronext in Amsterdam.
KPN said the bond will be used for general corporate purposes and extends the company’s maturity profile.
Citigroup, ING, Societe Generale and UBS acted as joint bookrunners for the transaction.
Standard & Poor’s has rated KPN ‘BBB’ with a stable outlook, Moody’s has rated it ‘Baa2’ with a negative outlook and Fitch has rated it ‘BBB’ with a negative outlook.
Fitch said in a statement the “favourable pricing” KPN received for the bond, compared with peers in southern Europe, shows “sovereign risk will continue to play an important part in differentiating how these companies fund themselves”.
The agency noted that KPN’s bond priced at 195 basis points over mid-swaps, while Spanish incumbent Telefonica’s six-year eurobond priced at 300 basis points just two weeks earlier, despite the latter’s higher ‘BBB+/Stable’ rating.
“The successful placement of both the KPN and Telefonica transactions is a positive sign of investor appetite for the sector,” Fitch said. “But it also highlights the funding disadvantage that an issuer can face simply by virtue of its head office location – something that takes little or no account of the geographic reach or relative strength of the underlying businesses.”
