Release of 25.01.2013
The Telekom Austria Group (VSE: TKA, OTC US: TKAGY) announces that, after a successful roadshow in Germany, Great Britain and the Netherlands, it has yesterday placed a hybrid bond with a volume of EUR 600 mn and a coupon of 5.625%.
The hybrid bond, ISIN XS0877720986, is a subordinated bond with perpetual maturity. The first redemption can, except in certain circumstances, take place after five years.
The annual coupon amounts to 5.625% until the first reset date, 1 February 2018. Subsequently there will be a reset date every five years. The coupon is established two days prior to the respective reset dates. In addition to this, on 1 February 2023 and 1 February 2038, the coupon increases by an additional coupon step-up of 0.25% and 0.75%. Coupon payments can be deferred.
The strong demand for this transaction was highlighted by an order book of approximately EUR 4 bn. This issue was primarily placed with investors from Great Britain, Germany, Italy, Switzerland, Austria and France.
The expected ratings for the bond are Baa3 by Moody’s and BB+ by S&P. The Telekom Austria Group expects the rating agencies to consider half of the bond as equity.
„This innovative financial instrument represents the first hybrid bond transaction in the European telecom sector. This transaction strengthened the capital structure of Telekom Austria Group while proactively securing its solid investment grade rating. This underlines the rating’s central role in Telekom Austria Group’s finance strategy. The great demand by investors resulted in the attractive coupon of 5.625%" said Hans Tschuden, Chief Financial Officer of the Telecom Austria Group.
The bond proceeds will be used for general corporate purposes, especially for the acquisition of YESSS! and other assets, frequency auctions and the extension of existing frequency contracts.
Citigroup and Morgan Stanley acted as joint structuring advisors and together with BofA Merrill Lynch and Unicredit as joint bookrunners.
Legal notice:
This information is neither an offer nor a solicitation for an offer to purchase notes (the "Notes") of Telekom Austria AG and/or Telekom Finanzmanagement GmbH (each an "Issuer"). Offers of Notes (each an "Offer") is solely made on the basis of a base prospectus which has been approved by the Commission de Surveillance du Secteur Financier (CSSF) of the Grand Dutchy of Luxembourg and is published on the website of the Luxembourg Stock Exchange under www.bourse.lu<http://www.bourse.lu/Accueil.jsp> and a copy of which may be obtained by Investors at the registered office of the Issuer at A-1020 Vienna, Lassallestraße 9 free of charge. Only the information contained in the Prospectus is binding in connection with the Offer.