Telefónica issues bonds worth €2bn

By:
James Pearce
Published on:

Spanish operator is looking to alleviate more than €53bn of debts after axing Telxius listing

Telefónica has issued bonds worth €2 billion less than two weeks after it cancelled a listing of infrastructure subsidiary Telxius due to weak investor demand.

In a statement, the Spanish giant said bonds worth €1.25 billion would mature in 2020, with the rest set to mature in 2031.

Analysts at Spain’s Self Bank told The Local ES that the debt issuance would “compensate the lack of cash coming in” after Telefónica opted not list Telxius. The IPO had been forecast to raise around €1.2 billion.

Telefónica initially launched Telxius, its subsea cable infrastructure and telecommunications tower unit, in February and planned to float between 25% and 40% of the shares earlier this month, but cancelled the IPO on 30 September, citing weak investor interest.

The Spanish operator is indebted to the tune of around €53 billion, and has been looking for ways to reduce that figure, including the proposed sale of O2 UK. Earlier this year, the European Commission rejected CK Hutchison’s £10.25 billion bid to buy Telefónica's UK arm, and the operator has admitted it is considering a flotation of the unit.

The operator may have another option, however, after Cellnex CEO Tobias Martinez recently declared an interest in Telefónica's infrastructure assets.