Telefónica Issues The First Perpetual “Green” Hybrid Bond In The Global Telecom Sector

Telefónica issues the first perpetual “green” hybrid bond in the global telecom sectorTelefónica continues to refinance its debt to reduce its cost and extend the due dates

The company has announced the start of a repurchase process for two outstanding bonds. One has a nominal value of 600 mln GBP (outstanding 172 mln GBP), with maturity of 7 years and a coupon of 6.25%.  The other has a nominal value of 625 mln eur ( outstanding 293 million EUR), with maturity of 8 years and a coupon of 7.625%. The offers will end on February 3.

To refinance these securities, Telefónica has issued the first perpetual “green” hybrid bond in the global telecommunications sector. The bond has a nominal amount of 500 million euros and will pay a fixed interest rate of 2,025% per year until May 5, 2027 (redemption date). As of this date, the bond will carry a fixed rate equivalent to a 7-year swap plus a margin of 2,663% until February 5, 2030. From this date until May 5, 2047 the margin will be 2,913% and from then it will be 3,663%.

The demand has exceeded 2 billion euros, so the issue has been over 4 times subscribed. The funds will be used to finance projects aimed at increasing the company’s energy efficiency, via the transformation of copper to fiber (85% more energy efficient). It will also boost renewable energy self-generation. The subscription and disbursement is scheduled for February 5.

In addition, Telefónica has issued a further 1 billion euros, with a 10-year maturity, an annual coupon of 0.644% and a par issue price.

Telefónica continues to refinance its debt to reduce its cost and extend the due dates.

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