Telecom Italia borrows €1bn at 2.5%

Alan Burkitt-Gray
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Telecom Italia cuts average interest rate to 5.1% on latest €1bn bond issue

Telecom Italia – the holding company for Sparkle and TIM – is borrowing €1 billion at what it says is the lowest rate ever and well below the average interest it is paying.

The group said: “The great quality and amount of the orders received once again confirms the market’s positive attitude towards Telecom Italia’s credit, allowing the company to price the issue with a yield lower than initial guidance, for a 2.5% coupon being the lowest amongst the non-convertible Eurobonds ever issued by the group.”

Three years ago, Telecom Italia launched another €1 billion bond, when the rate was just under 4.6%. The average cost of the group’s debt in 2014 was 5.4%. Now, says the company, it is 5.1%.

The 2017 bond is for six and a half years. It will mature on 19 July 2023. The notes will be issued under the Group’s €20 billion medium term note programme and will be listed on the Luxembourg Stock Exchange.