Telecom Italy gets the bond buyback program off the ground. With a press release, the Tlc group announces the invitation to savers to offer the "Notes" in their possession both separately and jointly, "against a cash consideration. The total nominal value of the bonds subject to the buyback is 3,351 billion.
In the offer document, Telecom fixes for now only the price of the 2015 Notes which will be repurchased at 101,65% (therefore 101.650 euros for every 100.000 in nominal value) while for notes maturing in 2016 a spread of 36 basis points has been defined on the interpolated Mid-swap rate and for 2017 notes the spread is fixed at 88 and 110 basis points, respectively for January and September maturities. In the latter three cases, the price will be communicated on 21 January.
Telecom also explains that the operation is aimed atissue of new bonds in euros under its €20 billion medium-term programme. “A portion of the proceeds from the New Notes – specifies the press release – will be used for the payment of the Repurchase Price and/or the Payment of the Accrued Interest for the Notes accepted for purchase pursuant to the Offers. This will allow the Company to refinance its maturing debt in advance, taking advantage of the current favorable market conditions and extending the average maturity of its debt”. The advantage for bondholders will instead be to obtain liquidity.
The maximum aggregate amount of the buyback will be determined “at the sole discretion of the company as soon as practicable after the pricing time for the new notes” scheduled for today and announced to the market. The allocation of the purchase between the various series of bonds remains at Telecom's discretion within the maximum amount envisaged. A full description of the terms and conditions of the Offers is contained in the Tender Offer Memorandum. BNP Paribas, Crédit Agricole Corporate and Investment Bank and Société Générale act as Dealer Manager of the Offers. Here the press release issued by Telecom is attached illustrating the operation.
Attachments: Cs_BuyBack_ita.pdf
