Telecom Italia: successful closing for the euro 2 bn note issue

01/29/2001 - 00:00 PM

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Telecom Italia announces that the note issue launched this morning, which is exchangeable into ordinary shares of Telecom Italia Mobile ("TIM") or Seat Pagine Gialle ("Seat PG") and incorporates the right to the Issuer to pay the amount due to the investor in cash, has closed successfully.

The underwriters´ book has been oversubscribed permitting the issuing price to be set within the announced price range.

This is the first "best of" exchangeable notes (giving the right to choose between two different underlying stocks) issued by an Italian group and is the largest such offering launched to date in the Euromarkets.

The notes will have the following characteristics:

- Issuer: Telecom Italia Capital S.A.
- Guarantor: Telecom Italia S.p.A.
- Amount
: Euro 2 billion
- Green Shoe
: Euro 500 million
- Maturity
: 5 years (within March 2006)
- Coupon
: 1%
- Issue price
: Par
- Price at maturity
: 117.69%
- Yield to maturity
: 4.25% per year
- Initial conversion price
: 11.0 euros per share for TIM (+31.22% of the market price of today). For the ordinary shares of Seat PG the conversion price is fixed in 4.3 euros per share (+102.83% of the market price of today).
- Actual price at maturity
: 12.95 euros per share for TIM (+54.43% of the market price of today). 5.06 euros per share for Seat PG (+138.71% of the market price of today).

Given the various solutions envisaged by the operation structure, Telecom Italia confirms its intention to exercise the right to pay cash the amount due.

The operation falls within the Telecom Italia Group programme to refinance, by lengthening the maturity, the Group´s existing indebtedness without altering the overall dimensions, while providing competitively priced financing.