Telecom Italia successfully launches 2.5 billion dollar bond issue

09/21/2005 - 00:00 PM

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The transaction will allow the group to reduce the average cost of debt

Telecom Italia announces that Telecom Italia Capital S.A. today concluded the launch of a USD 2.5 billion, multi-tranche bond issue.

The issuance will be the first takedown from the issuer’s USD 10 billion Shelf Registration Programme filed in August with SEC and aims to refinance debt maturities and diversify the currency and investor base. The issuance will also allow the group to reduce its average cost of debt.

Telecom Italia fixed the total amount of the issuance at USD 2.5 billion, divided into two 5-year tranches, one fixed-rate and one floating rate, and a 10-year fixed-rate tranche.

The characteristics of the securities are:

5-year floating-rate tranche

Issuer:    Telecom Italia Capital S.A.
Guarantor:   Telecom Italia S.p.A.
Amount:   USD 400 million
Settlement date:  28 September 2005
Maturity:   01 February 2011
Coupon:   USD Libor 3M + 0.48%
Issue price:   100%
Redemption price:  100%

The effective yield to maturity of the 5-year floating-rate tranche is equal to USD Libor 3m plus 48 basis points.

5-year fixed-rate tranche

Issuer:    Telecom Italia Capital S.A.
Guarantor:   Telecom Italia S.p.A.
Amount:   USD 700 million
Settlement date:  28 September 2005
Maturity:   01 October 2010
Coupon:   4.875%
Issue price:   99.898%
Redemption price:  100%

The effective yield to maturity of the 5-year fixed-rate tranche is 4.958% per annum, corresponding to a yield of 91 basis points over the corresponding US Treasury note.

10-year fixed-rate tranche

Issuer:    Telecom Italia Capital S.A.
Guarantor:   Telecom Italia S.p.A.
Amount:   USD 1,400 million
Settlement date:  28 September 2005
Maturity:   01 October 2015
Coupon:   5.250%
Issue price:   99.370%
Redemption price:  100%

The effective yield to maturity of the 10-year fixed-rate tranche is 5.403% per annum, corresponding to a yield of 116 basis points over the corresponding US Treasury note.

This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful.

 

Milan, 21 September 2005