Telecom Italia issued a 9-year bond for 1 billion euro The company funds at its lowest coupon ever for a Euro bond and significantly below its average cost of debt

09/23/2016 - 05:45 PM

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The amount and quality of the orders received allowed Telecom Italia to raise funds at a yield lower than the initial guidance

 

The Securities referred to in this press release have not been and will not be registered under the US Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This announcement shall not constitute an offer to sell nor a solicitation of an offer to buy these securities.

 

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Telecom Italia successfully issued a Euro 1 billion fixed rate bond offered to institutional investors.

The great quality and amount of the orders received once again confirms the market’s positive attitude towards Telecom Italia’s credit, allowing  the company to price the issue with a yield lower than initial guidance, for a 3% coupon being the lowest ever amongst the non-convertible Euro bonds issued by  the Group.
The yield of the bond, equal to 3.025%, is largely below the Group’s average cost of debt (5.1% at the end of June, 2016).
The proceeds of the new issue will be used to optimize and refinance forthcoming debt maturities.

Details are:

Issuer: Telecom Italia S.p.A.
Amount: Euro 1 billion
Settlement date: 30 September 2016
Maturity: 30 September 2025
Coupon: 3.000%
Issue price: 99.806%
Redemption price: 100.000%

The actual yield to maturity of 3.025%, corresponds to a yield of 283 basis points above the reference rate (mid swap).

The notes will be issued under the Group’s Euro 20 billion EMTN programme and will be listed on the Luxembourg Stock Exchange.

 

Milan, 23 September 2016