Telecom Italia has issued a two-tranche eurobond to institutional investors for a total €1.5bn.
The issue consists of a €750m three-year tranche with a coupon of 4.625% and a €750m, six-and-a-half-year tranche with a coupon of 6.125%.
The…
Telecom Italia has issued a two-tranche eurobond to institutional investors for a total €1.5bn.
The issue consists of a €750m three-year tranche with a coupon of 4.625% and a €750m, six-and-a-half-year tranche with a coupon of 6.125%.
The three-year tranche, set to mature on 15 June 2015, priced at 99.685% to yield 4.74%, equal to a spread of 378 basis points above mid-swaps.
The six-and-a-half-year tranche, to mature on 14 December 2018, priced at 99.737% to yield 6.184%, equal to a spread of 473 basis points above mid-swaps.
The notes will be issued under the group’s €20bn EMTN programme and will be listed on the Luxembourg Stock Exchange.
Telecom Italia said the proceeds will be used to refinance maturing debt.
The company noted the quality of the orders book enabled it to marginally increase the size of the issue and price it at a lower yield than originally planned. Specifically, the company noted the issue’s 5.462% average yield aligns with its average cost of debt.
The active bookrunners for the issue were Barclays, Credit Agricole, JP Morgan, Royal Bank of Scotland and Societe Generale, while the passive bookrunners were Banca IMI, Mediobanca, Santander and Unicredit.
Moody’s has rated the issue Baa2 and Standard & Poor’s and Fitch have both rated it BBB.
Telecom Italia reported €7.39bn (US$9.57bn) in revenue for the first quarter – up 4.5% from the same period last year. Announcing the results in May, CEO Franco Bernabe said the group is on track to reaching its targeted net debt figure of €27.5bn (US$35.6bn) by the end of the year.
In April, the company said it was considering several options for reducing net debt, minimising the likelihood of having to make additional dividend cuts and boosting its fibre-optic network.
