The company still face some 3 billion euros redemptions this year. At the end of last year TIM said it had 9 billion euros of cash available, which would cover its refinancing needs until 2024. (Reporting by Sara Rossi, Anirudh Saligrama and Elvira Pollina; Editing by Valentina Za, Tomasz Janowski and Keith Weir)
(Writes through with context and analyst comment)
April 4 (Reuters) - Telecom Italia (TIM) has
become the first junk-rated European company to tap debt markets
after the recent banking turmoil, raising 400 million euros
through a sale of a new tranche of an existing bond due in 2028.
Dogged by stiff price competition in its domestic market,
TIM is seeking to restructure its operations selling its most
prized asset - the landline grid - and cut its 25 billion euro
debt pile.
In January, TIM had sold 850 million euros of the 2028 bond , which carries a 6.875% coupon at par, drawing
more than 2.5 billion euros in demand in its first foray into
the debt market after two years.
The latest bond sale, announced late on Monday, come after
recent market turmoil triggered by the troubles of U.S. lenders
Silicon Valley Bank and Signature Bank pushed up euro zone bond
yields, prompting many issuers to steer clear of markets.
TIM said it has sold the new tranche of the bond at
100.75, a price which implies a 6.69% yield. That compares with
a 4.4% average cost of the company's debt, according to broker
Akros.
The new debt issuance increases TIM's average cost of
debt by 5 basis points, Equita said in a research note, a figure
which is in line with the broker estimate of 130 million euros
of additional funding cost this year compared to 2022.
TIM would use the new bond sale proceeds to refinance
upcoming debt matutiries, as it did in January.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.