Telefonica SA Tender Offer for Notes

Date : 03/13/2018 @ 5:16AM
Source : Dow Jones News
Stock : Telefonica Sa (TEF)
Quote : 8.0  0.0 (0.00%) @ 5:29AM

Telefonica SA Tender Offer for Notes

Telefonica (NYSE:TEF)
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TIDMTDE

RNS Number : 5288H

Telefonica SA

13 March 2018

TELEFÓNICA, S.A. as provided in article 228 of the Spanish Stock Market Act (Ley del Mercado de Valores), hereby reports the following

SIGNIFICANT EVENT

Telefónica Europe B.V. (the "Issuer") invites today the holders of its outstanding

(i) EUR 1,125,000,000 Undated 5 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities (the "EUR 2018 Notes"),

(ii) EUR 850,000,000 Undated 5 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities (the "EUR 2019 Notes"),

(iii) EUR 750,000,000 Undated 6 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities (the "EUR 2020 Notes"),

(iv) GBP 600,000,000 Undated 7 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities (the "GBP Notes"),

(v) EUR 625,000,000 Undated 8 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities (the "EUR 2021 Notes"), and

(vi) EUR 1,000,000,000 Undated 10 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities (the "EUR 2024 Notes")

(each a "Series" and together the "Notes") irrevocably guaranteed by Telefónica, S.A. (the "Guarantor"), to tender such Notes for purchase by the Issuer for cash (each such invitation an "Offer" and together the "Offers").

The Offers are being made on the terms and subject to the conditions contained in the tender offer memorandum dated 13 March 2018 (the "Tender Offer Memorandum") and are subject to the restrictions set out in the Tender Offer Memorandum. Capitalised terms used and not otherwise defined in this announcement have the meaning given in the Tender Offer Memorandum.

Summary of the Offers

 
                                                    Aggregate 
 Description of                   First Reset   Principal Amount     Purchase     Benchmark     Fixed               Maximum Acceptance 
     Notes            ISIN           Date          Outstanding        Price          Rate       Spread   Priority         Amount 
---------------  --------------  ------------  ------------------  -----------  -------------  -------  ---------  -------------------- 
 
      EUR 
  1,125,000,000 
    Undated 5 
  Year Non-Call 
     Deeply 
  Subordinated 
   Guaranteed 
   Fixed Rate 
      Reset                                                            EUR 
   Securities                                                       103,187.67 
     Current                                                         per EUR 
  Coupon: 6.50%   XS0972570351     18/9/2018    EUR 1,125,000,000    100,000         N/A         N/A        1           Any and all 
      EUR         XS1148359356     4/12/2019     EUR 850,000,000      To be        EUR 2019     0.60%       2            An amount 
   850,000,000                                                      determined      Notes                            determined by the 
    Undated 5                                                                    Interpolated                       Issuer in its sole 
  Year Non-Call                                                                    Mid-Swap                           discretion. The 
     Deeply                                                                          Rate                             total aggregate 
  Subordinated                                                                                                       principal amount 
   Guaranteed                                                                                                       of Priority 2 Notes 
   Fixed Rate                                                                                                          accepted for 
      Reset                                                                                                          purchase will not 
   Securities                                                                                                           exceed the 
     Current                                                                                                        difference between 
  Coupon: 4.20%                                                                                                      (i) the aggregate 
                                                                                                                    principal amount of 
                                                                                                                       New Notes (as 
                                                                                                                    defined herein) and 
                                                                                                                    (ii) the aggregate 
                                                                                                                     principal amount 
                                                                                                                    outstanding of the 
                                                                                                                      EUR 2018 Notes 
                                                                                                                    prior to the Offers 
      EUR         XS1050460739     31/3/2020     EUR 750,000,000      To be        EUR 2020     0.65%       2            An amount 
   750,000,000                                                      determined      Notes                            determined by the 
    Undated 6                                                                    Interpolated                       Issuer in its sole 
  Year Non-Call                                                                    Mid-Swap                           discretion. The 
     Deeply                                                                          Rate                             total aggregate 
  Subordinated                                                                                                       principal amount 
   Guaranteed                                                                                                       of Priority 2 Notes 
   Fixed Rate                                                                                                          accepted for 
      Reset                                                                                                          purchase will not 
   Securities                                                                                                           exceed the 
     Current                                                                                                        difference between 
  Coupon: 5.00%                                                                                                      (i) the aggregate 
                                                                                                                    principal amount of 
                                                                                                                       New Notes (as 
                                                                                                                    defined herein) and 
                                                                                                                    (ii) the aggregate 
                                                                                                                     principal amount 
                                                                                                                    outstanding of the 
                                                                                                                      EUR 2018 Notes 
                                                                                                                    prior to the Offers 
      GBP         XS0997326441    26/11/2020     GBP 600,000,000      To be       GBP Notes     0.95%       2            An amount 
   600,000,000                                                      determined   interpolated                        determined by the 
    Undated 7                                                                      Mid-Swap                         Issuer in its sole 
  Year Non-Call                                                                      Rate                             discretion. The 
     Deeply                                                                                                           total aggregate 
  Subordinated                                                                                                       principal amount 
   Guaranteed                                                                                                       of Priority 2 Notes 
   Fixed Rate                                                                                                          accepted for 
      Reset                                                                                                          purchase will not 
   Securities                                                                                                           exceed the 
     Current                                                                                                        difference between 
  Coupon: 6.75%                                                                                                      (i) the aggregate 
                                                                                                                    principal amount of 
                                                                                                                       New Notes (as 
                                                                                                                    defined herein) and 
                                                                                                                    (ii) the aggregate 
                                                                                                                     principal amount 
                                                                                                                    outstanding of the 
                                                                                                                      EUR 2018 Notes 
                                                                                                                    prior to the Offers 
      EUR         XS0972588643     18/9/2021     EUR 625,000,000      To be        EUR 2021     1.00%       2            An amount 
   625,000,000                                                      determined      Notes                            determined by the 
    Undated 8                                                                    Interpolated                       Issuer in its sole 
  Year Non-Call                                                                    Mid-Swap                           discretion. The 
     Deeply                                                                          Rate                             total aggregate 
  Subordinated                                                                                                       principal amount 
   Guaranteed                                                                                                       of Priority 2 Notes 
   Fixed Rate                                                                                                          accepted for 
      Reset                                                                                                          purchase will not 
   Securities                                                                                                           exceed the 
     Current                                                                                                        difference between 
     Coupon:                                                                                                         (i) the aggregate 
     7.625%                                                                                                         principal amount of 
                                                                                                                       New Notes (as 
                                                                                                                    defined herein) and 
                                                                                                                    (ii) the aggregate 
                                                                                                                     principal amount 
                                                                                                                    outstanding of the 
                                                                                                                      EUR 2018 Notes 
                                                                                                                    prior to the Offers 
      EUR         XS1050461034     31/3/2024    EUR 1,000,000,000     To be        EUR 2024     1.95%       2            An amount 
  1,000,000,000                                                     determined      Notes                            determined by the 
   Undated 10                                                                    Interpolated                       Issuer in its sole 
  Year Non-Call                                                                    Mid-Swap                           discretion. The 
     Deeply                                                                          Rate                             total aggregate 
  Subordinated                                                                                                       principal amount 
   Guaranteed                                                                                                       of Priority 2 Notes 
   Fixed Rate                                                                                                          accepted for 
      Reset                                                                                                          purchase will not 
   Securities                                                                                                           exceed the 
     Current                                                                                                        difference between 
     Coupon:                                                                                                         (i) the aggregate 
     5.875%                                                                                                         principal amount of 
                                                                                                                       New Notes (as 
                                                                                                                    defined herein) and 
                                                                                                                    (ii) the aggregate 
                                                                                                                     principal amount 
                                                                                                                    outstanding of the 
                                                                                                                      EUR 2018 Notes 
                                                                                                                    prior to the Offers 
 

The Offers commence on 13 March 2018 and will expire at 17:00 CET on 20 March 2018 (the "Expiration Deadline"), unless extended, re-opened, withdrawn or terminated at the sole discretion of the Issuer.

Purpose of the Offers

The purpose of the Offers and the planned issuance of New Notes (as defined below) is, amongst other things, to proactively manage the Issuer's layer of hybrid capital. The Offers also provide Noteholders with the opportunity to switch into the New Notes (as defined below) ahead of upcoming first call dates.

New Financing Condition

The Issuer intends to issue new EUR denominated Undated 5.7 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities guaranteed by the Guarantor and new EUR denominated Undated 8.5 Year Non-Call Deeply Subordinated Guaranteed Fixed Rate Reset Securities guaranteed by the Guarantor (the "New Notes"). Whether the Issuer will accept for purchase any Notes validly tendered in the Offers is subject, without limitation, to the settlement of the issue of the New Notes (the "New Financing Condition").

Purchase Price

Subject to the applicable Minimum Denomination in respect of the relevant Series of Notes, the price payable per EUR 100,000 or GBP 100,000 (as applicable) in principal amount of the Notes (the "Purchase Price") will be (i) in respect of the EUR 2018 Notes, EUR 103,187.67 per EUR 100,000 and (ii) in respect of the remaining Series of Notes, calculated by reference to the sum of the relevant fixed spread in respect of that Series, as specified in the table above (the "Fixed Spread Amount") and the relevant Benchmark Rate at or around the Pricing Time, expressed as a percentage and rounded to the third decimal place (with 0.0005 being rounded upwards). In respect of any Notes accepted for purchase, the Issuer will also pay an amount equal to any accrued and unpaid interest on the relevant Notes from, and including, the relevant interest payment date for the Notes immediately preceding the Settlement Date up to, but excluding, the Settlement Date, which is expected to be no later than 23 March 2018.

Notes repurchased by the Issuer pursuant to the Offer may be cancelled. Notes which have not been validly tendered and accepted for purchase pursuant to the Offers will remain outstanding after the Settlement Date.

Maximum Acceptance Amount

The Issuer proposes to accept Notes for purchase up to a maximum aggregate principal amount equal to the aggregate principal amount of the New Notes (the "Maximum Acceptance Amount") on the terms and conditions contained in the Tender Offer Memorandum.

If the Issuer decides to accept any Notes for purchase pursuant to the Offers, the Issuer intends to accept any and all of the EUR 2018 Notes for purchase in priority to the Notes of any other Series. The Issuer intends that the aggregate principal amount of Notes of all remaining Series which it will accept for purchase (if any) will be an amount that will not exceed: (i) the Maximum Acceptance Amount, less (ii) the aggregate principal amount outstanding of the EUR 2018 Notes (being EUR 1,125,000,000). The Issuer will determine the allocation of the acceptance amounts across the remaining Series of Notes in its sole discretion, and reserves the right to accept significantly more or significantly less (or none) of any such Series (subject to pro rata scaling, if applicable) as compared to the other Series. If the Issuer decides to accept any GBP Notes for purchase, the Issuer will determine the Euro equivalent of the relevant Series Acceptance Amount based on the prevailing GBP/EUR exchange rate at the Expiration Deadline, as shown on Bloomberg Page BFIX (or, if such screen is unavailable or is manifestly erroneous, a generally recognised source for currency quotations with quotes as of a time as close as reasonably possible to the aforementioned time as determined by the Issuer).

Indicative Timetable

 
                                           Number of Business Days from and 
 Date                                              including Launch              Action 
--------------------------------------  --------------------------------------  -------------------------------------- 
 13 March 2018                                             1                     Commencement of the Offers 
 On or before the Expiration Deadline                                            Pricing of the New Notes 
 17:00 CET on 20 March 2018                                6                     Expiration Deadline 
                                                                                 Deadline for receipt by the Tender 
                                                                                 Agent of all Tender Instructions in 
                                                                                 order for Noteholders 
                                                                                 to be able to participate in the 
                                                                                 Offers. 
 At or around 11:00 a.m. CET on 21                         7                     Indicative Results 
 March 2018                                                                      Announcement of the Maximum 
                                                                                 Acceptance Amount, including the 
                                                                                 GBP/EUR exchange rate, and 
                                                                                 non-binding 
                                                                                 indication by the Issuer of the level 
                                                                                 at which it intends to set each 
                                                                                 Series Acceptance Amount 
                                                                                 and indicative proration factors (if 
                                                                                 any). 
 At or around 1:00 p.m. CET on 21                          7                     Pricing Time 
 March 2018                                                                      Determination of each Benchmark Rate 
                                                                                 (for the purpose of calculating each 
                                                                                 Repurchase Yield 
                                                                                 and each Purchase Price) 
 As soon as practicable after the                          7                     Announcement of Result of Offers 
 Pricing Time                                                                    Announcement of the Issuer's decision 
                                                                                 whether to accept valid tenders of 
                                                                                 Notes for purchase 
                                                                                 pursuant to any or all of the Offers 
                                                                                 subject only to the satisfaction of 
                                                                                 the New Financing 
                                                                                 Condition and, if so accepted, 
                                                                                 details of (i) each Purchase Price, 
                                                                                 the Accrued Interest, each 
                                                                                 Repurchase Yield and each Benchmark 
                                                                                 Rate, (ii) the final aggregate 
                                                                                 principal amount of the 
                                                                                 Notes of each Series tendered 
                                                                                 pursuant to the Offers and (iii) each 
                                                                                 Series Acceptance Amount 
                                                                                 and the pro-ration factor, if 
                                                                                 applicable, distributed. 
 Expected to be on 23 March 2018                           9                     Settlement 
                                                                                 Subject to satisfaction of the New 
                                                                                 Financing Condition, expected 
                                                                                 Settlement Date for the Offers. 
                                                                                 Payment of Purchase Consideration and 
                                                                                 Accrued Interest Payment in respect 
                                                                                 of the Offers. 
 
   Madrid, March 13,   2018 

None of the Offers, the Tender Offer Memorandum or this announcement constitute an offer of securities or the solicitation of an offer of securities to the public in Spain under the Spanish Securities Market Law approved by Legislative Royal Decree 4/2015, of 23 October (Real Decreto Legislativo 4/2015, de 23 de octubre, por el que se aprueba el texto refundido de la Ley del Mercado de Valores), Royal Decree 1310/2005, of 4 November 2005 and Royal Decree 1066/2007, of 27 July 2007. Accordingly, neither the Tender Offer Memorandum nor this announcement has been and will not be submitted for approval nor approved by the Spanish Securities Market Regulator (Comisión Nacional del Mercado de Valores).

Not for distribution in or into or to any person located or resident in the United States, its territories and possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands, any state of the United States and the District of Columbia) (the "United States") or to any U.S. person or into any other jurisdiction where it is unlawful to distribute this announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

END

TENVXLBFVXFZBBL

(END) Dow Jones Newswires

March 13, 2018 05:01 ET (09:01 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.

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