REG - Telefonica SA - Pricing Mandatory Exchangeable Bonds <Origin Href="QuoteRef">TEF.MC</Origin>

Telefonica SAAnnouncement

06/09/2014 16:47

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RNS Number : 5783M
Telefonica SA
17 July 2014 
 
RAMIRO SÁNCHEZ DE LERÍN GARCÍA-OVIES 
 
Secretary General and 
 
of the Board of Directors 
 
TELEFÓNICA, S.A. 
 
TELEFÓNICA, S.A., pursuant to the provisions of article 82 of the Securities
Market Act, hereby notifies the following 
 
RELEVANT EVENT 
 
Further to Relevant Event published yesterday in relation to the issue by
TELEFÓNICA, S.A. (the "Company") of mandatory exchangeable bonds (the "Bonds")
exchangeable into ordinary shares of Telecom Italia S.p.A ("Telecom Italia"),
we hereby announce that, upon conclusion of the bookbuilding process carried
out by the joint bookrunners, the final terms for the Bonds have been fixed as
set out below: 
 
1.         The final amount of the issue totalled 750 million euros. 
 
2.         The Bonds, which have been issued at par value, will mature on 24
July 2017, unless exchanged or redeemed in advance. 
 
3.         The Bonds will accrue a nominal fixed interest rate of 6.0% per
annum, payable annually in arrears, as of the settlement and closing date. 
 
4.         The minimum exchange price of the Bonds has been set at 0.8600
euros and the maximum exchange price at 1.0320 euros per ordinary share of
Telecom Italia, which represents a premium of 20% over said minimum exchange
price. 
 
5.         The Bonds would be exchanged for a maximum number of Telecom Italia
ordinary shares representing 6.5% of its current voting share capital. 
 
6.         It is envisaged that the closing and settlement of the Bonds will
take place on 24 July 2014, provided that the conditions foreseen in the
subscription agreement that the Company has signed yesterday with the joint
bookrunners are fulfilled. 
 
As a result of this transaction, Telefónica would retain after the Telco
S.p.A. demerger and the transfer of the underlying shares of the Bonds, a
stake between 8.3% and 9.4% in Telecom Italia's current voting share capital.
Therefore, Telefónica would reduce its indirect stake in Telecom Italia to
levels below the stake held prior to Telco S.p.A.'s recapitalization of
September 2013. 
 
The transaction allows Telefónica to capture a significant part of the strong
revaluation of its indirect stake in Telecom Italia since then, while keeping
exposure to its future upside potential up to the maximum exchange price. 
 
In addition, the partial divestment of the stake through this issue allows
Telefónica to pre-emptively neutralize approximately half of the net debt
increase which would eventually follow Telco S.p.A.'s demerger. 
 
We also remind you that the Company will be applying for the listing of the
Bonds on the unregulated secondary market (multilateral trading platform)
Freiverkehr of the Frankfurt Stock Exchange, which is expected to take place
within 90 days following the settlement date. 
 
Madrid, 17 July 2014 
 
Disclaimer 
 
THIS DOCUMENT IS NOT FOR GENERAL DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR
INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER
JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY APPLICABLE LAW.
THIS DOCUMENT IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY
OFFER TO BUY SECURITIES, NOR SHALL THERE BE ANY OFFER OF SECURITIES IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD BE UNLAWFUL. THE SECURITIES
MENTIONED IN THIS DOCUMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED IN THE
UNITED STATES UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE "US
SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF
THE UNITED STATES, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OF BENEFIT OF, ANY US PERSON (AS SUCH TERM IS DEFINED IN
REGULATION S UNDER THE SECURITIES ACT), EXCEPT PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE US SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE
SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTION. 
 
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