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.