Telefonica SA TDE Preferred Securities of Telefónica Finance

  Telefonica SA (TDE) - Preferred Securities of Telefónica Finance

RNS Number : 0354Q
Telefonica SA
31 October 2012




                                      

TELEFÓNICA, S.A. (hereinafter "Telefónica") as  provided in article 82 of  the 
Spanish Securities Market Act (Ley del Mercado de Valores), hereby reports the
following



                              SIGNIFICANT EVENT

                                      

  OFFER TO PURCHASE PREFERRED SECURITIES OF TELEFÓNICA FINANCE USA LLC, AND
CONCURRENTLY AND IN CONNECTION THEREWITH, OFFER TO SELL TREASURY SHARES AND TO
        SUBSCRIBE NEWLY ISSUED UNSECURED DEBENTURES OF TELEFÓNICA, S.A

Telefónica reports the launch of an offer to purchase the preferred securities
of Telefónica Finance USA LLC, ISIN code USU87942AA33, having a nominal  value 
of 1,000  euros each  (the "Preferred  Securities") and,  concurrently and  in 
connection therewith, an offer to sell ordinary shares of Telefónica, having a
nominal value of 1 euro each, currently held as treasury stock (the  "Shares") 
and to subscribe for newly issued  unsecured debentures of Telefónica, with  a 
nominal value  of  600  euros  each  (the  "Debentures"),  on  the  terms  and 
conditions detailed below:

(i)... The offer to purchase the  Preferred Securities and to sell the  Shares 
and to  subscribe  for the  Debentures  (collectively, the  "Offer")  will  be 
addressed exclusively to the holders of Preferred Securities that are not  and 
do not reside in the United States of America.

(ii) The price  offered for the  purchase of the  Preferred Securities is  a 
price equal to 100%  of their nominal value,  i.e., 1,000 euros per  Preferred 
Security,  in  cash,   and  such  amount   is  subject,  unconditionally   and 
irrevocably, to  its simultaneous  reinvestment in  Shares and  Debentures  as 
described below. Also,  the accrued  interest on the  Preferred Securities  in 
respect of which the  Offer is accepted, since  the last coupon payment  until 
the date of the operation (on November 29, 2012), will be paid.

(iii) The  purchase  price  of  the Preferred  Securities  (1,000  euros  per 
Preferred Security)  is  subject,  unconditionally  and  irrevocably,  to  its 
simultaneous reinvestment in  the acquisition of  Shares and subscription  and 
payment of Debentures in the following proportion:

a) 40% of that price (i.e., 400 euros per Preferred Security) will  be 
assigned to the purchase of Shares at a price equal to the arithmetic mean  of 
the average weighted prices of Telefónica shares during the five trading  days 
preceding the end of the acceptance  period of the Offer (such day  inclusive) 
(i.e., from November  19 until November,  23, 2012, both  inclusive), with  a 
minimum price of 9.75 euros and a maximum price of 11.05 euros per Share.

b) The remaining 60% (i.e., 600 euros per Preferred Security) will  be 
assigned to  the subscription  and  payment of  Debentures  at 100%  of  their 
nominal value.  Consequently, an  investor accepting  the Offer  will have  to 
subscribe and pay one Debenture for each Preferred Security.

The Debentures  are newly  issued unsecured  debentures of  Telefónica with  a 
nominal value of 600 euros each, with a fixed annual interest rate of  4.184%, 
payable quarterly on February 28, May 29,  August 29, and November 29 of  each 
year, and maturity date on November 29, 2022 (however, Telefónica may make  an 
early repayment, in full or in part, of the Debentures on any interest payment
date). Application for  admission of  the Debentures  to trading  on the  AIAF 
Fixed Income  Market,  for  trading  on the  Electronic  Debt  Trading  System 
(Sistema Electrónico de Negociación de Deuda) ("SEND") will be requested.

Holders of Preferred Securities  who wish to accept  the Offer should  contact 
the institution where they  have the Preferred  Securities deposited and  fill 
out the corresponding order of acceptance. Orders of acceptance must encompass
all Preferred Securities owned by any such holder.

The schedule for the Offer is the following:

Ø November 5, 2012: Start of the acceptance period of the Offer.

Ø November 23, 2012: Ending of the acceptance period of the Offer.

Ø November 19, 20, 21,  22 and 23, 2012:  Reference dates for determining  the 
price of Shares in the Offer.

Ø  November  29,  2012  (date  of  transaction):  Purchase  of  the  Preferred 
Securities, sale of Shares and subscription and payment of the Debentures.

Ø November 30, 2012: Admission to trading of the Debentures.

Ø December 4, 2012: Settlement date of the purchase of the Shares.

The securities note (prospectus) relating to the Offer has been registered  as 
of today in the official registers  of the Spanish National Securities  Market 
Commission (Comisión Nacional  del Mercado de  Valores, CNMV). The  securities 
note and the summary  are available, along with  the registration document  of 
Telefónica, on  the website  of  the CNMV  (www.cnmv.es)  and on  the  Company 
website (www.telefonica.com)  containing the  full description  of the  terms, 
conditions and procedure of the Offer.



Madrid, October 31^st, 2012

Disclaimer

This announcement is  not a  prospectus and  investors should  not accept  the 
Offer except  on the  basis of  the information  contained in  the  prospectus 
(securities note​​).

The publication of  this information  and/or prospectus  (securities note)  in 
jurisdictions other than Spain may be restricted by applicable law. People who
have access to this communication should enquire about restrictions and comply
with them. Any breach of these restrictions can constitute an infringement  on 
securities markets legislation in any such jurisdictions.

In particular, this announcement  does not constitute an  offer in the  United 
States of America, Canada, United Kingdom, South Africa, Australia,  Portugal, 
Italy, Mexico, Argentina or  Japan, and in general  in any other  jurisdiction 
other than the Spanish.

The information  contained  herein should  not  be published,  distributed  or 
transmitted to residents in the United States of America or any other  country 
in which the distribution of this information is restricted by law. The  Offer 
is not subject to registration in any other jurisdiction different than Spain,
and therefore, it is not intended to investors resident in jurisdictions which
securities law requires an  authorization or registration  of a prospectus  or 
any other document,  therefore these  holders of  Preferred Securities  cannot 
accept this Offer. The Offer is not being made and will not be made,  directly 
or indirectly, in or though the United  States of America, or by using  e-mail 
or any other means of  interstate or foreign commerce,  nor to the benefit  of 
U.S. persons,  as  such  term  is  defined in  Regulation  S  under  the  U.S. 
Securities Act of 1933 (the "Securities Act").

The information contained herein does not  constitute an offer to sell in  the 
United States of America. The Shares and Debentures have not been and will not
be registered under the Securities Act  or under any other securities laws  of 
any State of  the United  States of  America and  cannot be  offered, sold  or 
delivered, directly or indirectly, in the United States of America or to  U.S. 
persons without previous registration, or under an exemption for  registration 
under the Securities Act. The Shares and Debentures of Telefónica will only be
offered and sold outside the United  States of America, under Regulation S  of 
the Securities Act.

Under this  document, no  money,  securities or  other compensation  is  being 
solicited and, if sent in response  to the information contained herein,  they 
will not be accepted.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


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