Telefónica Deutschland successfully places €600 million debut benchmark bond

Very successful debut on the international bond markets
High demand led to more than 3x oversubscribed orderbook
Deal volume upsized to €600 million
MUNICH. Today, Telefónica Deutschland has successfully placed senior unsecured notes with a total principal volume of €600 million due on November 22, 2018. The fixed rate bonds, issued by O₂ Telefónica Deutschland Finanzierungs GmbH and guaranteed by Telefónica Deutschland Holding AG, pay a 1.875 percent coupon and were issued at a price of 99.162 percent, corresponding to an issue spread of 98 bps over the 5 year Euro midswap rate. The bonds carry a denomination of €1,000 and were issued based on a bond security prospectus.

The transaction was highly oversubscribed, benefitting from strong demand from institutional as well as private investors, following a credit investor update call on the previous day. On that basis and a yield of 2.053 percent, Telefónica Deutschland decided to upsize the transaction moderately to €600 million from an initial €500 million benchmark target. In terms of region, allocation was driven by high-quality asset managers from Germany and the UK with each taking approximately 30 percent of the allocation. The net proceeds of the bonds will be used for general corporate purposes. The net debt level of the company will not increase after the issuance of the bond. "This offering is a great success for us", says Rachel Empey, CFO of Telefónica Deutschland. "The extraordinary demand demonstrates the confidence among investors in Telefónica Deutschland's strategy." The bonds will be listed for trading in the Regulated Market of the Luxembourg Stock Exchange under the ISIN code XS0912992160 as of November 22, 2013. The prospectus is available on the website of Telefónica Deutschland. Bank of America Merrill Lynch, BayernLB, Commerzbank and UBS Investment Bank 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. Telefónica Europe has 102 million mobile and fixed network customers in Spain, Great Britain, Ireland, the Czech Republic, Slovakia and Germany.