Two of Europe’s largest telcos are hailing the success of fresh bond issues, the funds from which will be used to pay-down debt.
France Telecom Orange and Telecom Italia claim their respective funding rounds were heavily subscribed, with the former stating it received orders worth €4.8 billion for the ten-year bonds on offer. Orange raised €1 billion from the issue, and Telecom Italia a total of €1.5 billion – half of which relates to three-year bonds and the remainder six and-a-half years.
While Telecom Italia doesn’t go into detail regarding the level of orders received, it claims they were sufficient to enable it to increase the size of the issue and price it at a lower yield than initially anticipated. The quality of the orders “reflects the market’s positive attitude towards Telecom Italia’s credit,” the operator states.
Orange, meanwhile, explains it decided to issue the bonds now to capitalize on a drop in interest rates since mid-March. The sale “allows the Group to continue to increase the average maturity of its debt while reducing its average cost,” it states.