Telefonica Finance Unit Sells $2 Billion of Debt in 2-Part Issue

A financing arm of Telefonica SA (TEF), Spain’s biggest phone-services company, sold $2 billion of debt yesterday in the unit’s first dollar-denominated sale in two years.

Telefonica Emisiones SAU issued $750 million of 10-year, 4.57 percent bonds to yield 287.5 basis points more than similar-maturity U.S. Treasuries and $1.25 billion of five-year, 3.192 percent notes with a relative yield of 250 basis points, according to data compiled by Bloomberg. Proceeds will be used for general corporate purposes, according to a company filing.

The unit of Madrid-based Telefonica last sold dollar debt in February 2011 in an offering that included $1.25 billion of 3.992 percent, five-year debentures yielding 173 basis points more than benchmarks, Bloomberg data show.

The notes traded at 105.5 cents on the dollar for a yield of 1.98 percent on April 15, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

BNP Paribas SA, Goldman Sachs Group Inc., HSBC Holdings Plc, JPMorgan Chase & Co., Morgan Stanley and Societe Generale SA managed the offering, Bloomberg data show.

To contact the reporter on this story: Victoria Stilwell in New York at vstilwell1@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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