Telefónica Deutschland successfully places a 500 million Euro 7-year benchmark bond

-Successful placement of a 7-year bond
-Top 15 investors with more than 500 million Euro in orders
-Successful extension of the debt maturity profile
-Further investor diversification in the capital markets
MUNICH. Today Telefónica Deutschland has placed a senior unsecured bond with a total volume of 500 million Euro due on February 03, 2021. The fixed rate bond, issued by O2 Telefónica Deutschland Finanzierungs GmbH and guaranteed by Telefónica Deutschland Holding AG, pays a 2.375 percent coupon and was issued at a price of 99.624 percent, corresponding to an issue spread of 100 bps over the 7-year Euro Midswap rate. The bond carries a denomination of 1,000 Euro and was issued based on a bond security prospectus. After the inaugural issuance of a 600 million Euro 5-year bond in November, this is the second successful debt capital market transaction Telefónica Deutschland executed within the last three months.
The transaction was announced in the morning of 3 February 2014. The orderbook grew quickly with 155 orders from different investors. The top 15 investors made up more than 500 million Euro of orders in the orderbook, demonstrating investors' great comfort into Telefónica Deutschland's credit by these large single order sizes. The orderbook closed with a more than 2x oversubscription. Geographically, the final allocation was skewed towards German and Austrian investors (ca. 28 percent of the allocation). Fund managers participated with above-average interest in the transaction and were allocated ca. 61 percent of the deal size. Telefónica Deutschland could achieve a yield of 2.434 percent in this 7-year 500 million Euro bond issuance transaction. The net proceeds of the bond will be used for general corporate purposes. The net debt level of the company will not increase after the issuance of the bond.
Rachel Empey
"This issuance is another great success for us", says Rachel Empey, CFO of Telefónica Deutschland. "After the very successful debut transaction in November 2013, this is an important step to further establish ourselves in the debt capital markets and further broaden our investor base". The bond will be listed for trading in the Regulated Market of the Luxembourg Stock Exchange under the ISIN code XS1025752293 as of 10 February 2014. The prospectus is available on Telefónica Deutschland's website. HSBC, UBS Investment Bank and UniCredit Bank AG acted as joint bookrunners for the transaction.
Telefónica Deutschland Holding AG, listed at the Frankfurt Stock Exchange in the Prime Standard, and its wholly-owned, operationally active subsidiary Telefónica Germany GmbH & Co. OHG belong to Telefónica Europe and are part of the Spanish telecommunication group Telefónica S.A. The company offers its German private and business customers post-paid and prepaid mobile telecom products as well as innovative mobile data services based on the GPRS, UMTS and LTE technologies with its product brand O2. In addition, the integrated communications provider also offers DSL fixed network telephony and high-speed internet.

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