Launch of an offering of up to eur 2,000,000,000 unsecured equity-linked bonds due March 2022 by Telecom Italia S.p.A

03/19/2015 - 05:42 PM

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This announcement and the information contained herein is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, into or from the United States (or to U.S. persons), Canada, Australia, Japan, South Africa or in any other jurisdiction where to do so would be prohibited by the relevant laws of such jurisdiction. This announcement is not an offer of securities for sale nor a solicitation to purchase or subscribe for securities, in or into the United States, Australia, Canada, Japan or South Africa. Please see the important notice at the end of this announcement


Telecom Italia S.p.A. (the “Issuer”) announces the launch of an offering of EUR 1,500,000,000 Unsecured Equity-linked Bonds due 26 March 2022 (the “Bonds”), which may be increased by up to EUR 500,000,000.

The institutional bookbuilding period will commence concurrently with this announcement. However, the Joint Global Coordinators of the offering reserve the right to end the bookbuilding period at any time.

The offering is being made to qualified institutional investors only, outside the United States, in offshore transactions to non-U.S. persons (in reliance on Regulation S) and may be subject to restrictions in other jurisdictions.

The Issuer will convene an Extraordinary General Meeting to be held no later than 30 June 2015 (the “Long-Stop Date”) to seek shareholders’ approval in respect of the increase in share capital of the Issuer and the disapplication (for the purposes of the relevant capital increase) of preferential subscription rights pursuant to article 2441(5) of the Italian Civil Code to enable the issue of ordinary shares of the Issuer (the “Shares”) on conversion (the “Shareholder Resolutions”). Subject to the successful placement of the Bonds, the agenda of the Extraordinary General Meeting - to be held on 20 May, 2015 - will be complemented by the proposed increase in share capital by means of the issue of new ordinary shares, reserved to service the conversion and, therefore, with the exclusion of preferential subscription rights.

Following the adoption of the Shareholder Resolutions, the Issuer will give notice thereof to Bondholders (the “Physical Settlement Notice”).

Prior to the Physical Settlement Notice being given by the Issuer, the Bonds will be redeemed upon conversion at the option of Bondholders at the Cash Alternative Amount as defined in the Terms and Conditions of the Bonds. Provided the Issuer has given a Physical Settlement Notice the Bonds will be convertible into fully paid Shares.

If the Shareholder Resolutions are not passed by the Long-Stop Date, the Issuer may, by giving notice no later than 10 dealing days after the Long-Stop Date, elect to redeem all but not some only of the Bonds at the greater of (i) 102% of the principal amount of the Bonds, together with accrued interest and (ii) 102% of the Fair Bond Value of the Bonds (as defined in the Terms and Conditions of the Bonds), together with accrued interest.

The Bonds, which will be in registered form in the denomination of EUR 100,000 each, will be issued at par and will be redeemed at their principal amount at maturity on 26 March 2022 (7 years). The Bonds are expected to pay a coupon in the range of 0.875% and 1.375% per annum, payable semi-annually in arrear on 26 September and 26 March of each year, beginning on 26 September 2015.

The conversion price is expected to be set at a 70% premium above the Reference Price, which will be equal to the VWAP of the Shares on the Milan Stock Exchange (Borsa Italiana) on 20 March 2015.

The Issuer will have the right to redeem all but not some only of the Bonds at their principal amount together with accrued interest after 16 April 2019 if the VWAP of the Shares for a specified period in the Terms and Conditions of the Bonds, exceeds 130% of the prevailing conversion price or if 85% or more of the Bonds initially issued shall have been converted, redeemed or purchased and cancelled.

Upon redemption of the Bonds at maturity, the Issuer will have the option to deliver cash, shares or a combination thereof.

The final principal amount of the Bonds and coupon are expected to be announced on 20 March 2015. The conversion price is expected to be announced in a separate press release after the close of Borsa Italiana on 20 March 2015.

Settlement of the Bonds is expected to occur on 26 March 2015 ( the “Closing Date”).

The net proceeds of the Bonds will be used to pre-fund the capital expenditures plan recently announced.

The Issuer will agree to a lock-up ending on the date falling 90 days after the pricing date of the Bonds for the issue of Shares and convertible securities, subject to customary exceptions.

An application will be made to admit the Bonds to trading on an internationally recognised, regularly operating, regulated or non-regulated, stock exchange, as determined by the Issuer, within 30 days from the Closing Date.

BNP Paribas and J.P. Morgan are acting as Joint Global Coordinators and Joint Bookrunners of the offering. Barclays, Citi, Credit Suisse and Unicredit are also acting as Joint Bookrunners alongside the Joint Global Coordinators.

IMPORTANT NOTICE

This announcement is published for information purposes only pursuant to Italian law and is not an investment proposal and, in any case, may not be used as or deemed to be a sale offer or an invitation to offer or purchase or sell securities to the public.

The documentation relating to the offer of the Bonds shall not be submitted to CONSOB (the Italian Securities Exchange Commission) for approval pursuant to applicable laws and regulations and, therefore, the Bonds may not be offered, sold or distributed to the public in the territory of the Republic of Italy other than to qualified investors, as defined by Article 100 of Legislative Decree no. 58 of 24 February 1998, as subsequently amended (the “Italian Financial Services Act”), and pursuant to Article 34-ter, of CONSOB Regulation no. 11971 of 14 May 1999, as amended from time to time (the “CONSOB Regulation”), or in the other circumstances provided for by Article 100 of the Italian Financial Services Act and by the CONSOB Regulation.

This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia). This announcement is not an offer to sell securities or the solicitation of any offer to buy securities in the United States, nor shall there be any offer of securities in any jurisdiction in which such offer or sale would be unlawful. The securities mentioned in this announcement have not been and will not be registered in the United States under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. Persons (as defined in Regulation S under the Securities Act), absent registration or exemption from registration under the Securities Act. There will be no public offer of the securities in the United States or in any other jurisdiction.

This announcement and the offering when made are only addressed to, and directed in, Member States of the European Economic Area which have implemented the prospectus directive, at persons who are “qualified investors” within the meaning of article 2(1)(e) of the Prospectus Directive. In addition, in the United Kingdom this announcement is being distributed only to, and is directed only at, qualified investors (i) who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services and Markets Act 2000 (financial promotion) Order 2005, as amended (the “Order”) and qualified investors falling within Article 49(2)(a) to (d) of the Order, and (ii) to whom it may otherwise lawfully be communicated.

This announcement is not an offer to sell, nor a solicitation of an offer to buy any securities and any discussions, negotiations or other communications that may be entered into, whether in connection with the terms set out herein or otherwise, shall be conducted subject to contract. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Global Coordinators and the Joint Bookrunners or by any of their respective officers, employees or agents as to or in relation to the accuracy or completeness of this announcement, or any other written or oral information made available to any interested party or its advisers and any liability therefor is hereby expressly disclaimed.

Each of the Issuer, the Joint Global Coordinators and the Joint Bookrunners and their respective affiliates expressly disclaims any obligation or undertaking to update, review or revise any statement contained in this announcement whether as a result of new information, future developments or otherwise.

In connection with the offering of the Bonds, the Joint Global Coordinators and the Joint Bookrunners and any of their respective affiliates acting as an investor for its own account may take up the securities and in that capacity may retain, purchase or sell for its own account the securities or any other securities of the issuer or related investments, and may offer or sell the securities or other investments otherwise than in connection with the offering of the Bonds. The Joint Global Coordinators and the Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

Milan, 19 March 2015

Bondholders