November 30, 2017 / 3:31 PM / 18 days ago

Deutsche Telekom extends telecom trend

LONDON, Nov 30 (IFR) - Hot on the heels of Telefonica’s €1bn hybrid, another telco hit the euro market today but this time with a vanilla senior trade.

Demand for Deutsche Telekom’s €750m seven-year reached around €1.2bn, allowing leads to move pricing by 10bp from IPTs for a print at 25bp over swaps.

CreditSights, which pegged fair value at 20bp, had anticipated the tightly-priced offering to be well bid because of expected retail demand stemming from the minimum 1k denoms.

“We see this bond as a good way to increase exposure to Deutsche Telekom, following the reduction in event risk following the end of discussions between Sprint and T-Mobile US.”

In early November, DT’s US arm and rival Sprint ended their on-again off-again merger talks. The analysts don’t expect the failed combination to significantly alter the operating profile of T-Mobile US or its parent over the near-term.

“As such, we expect T-Mobile US to continue to drive the bulk of Deutsche Telekom’s Ebitda growth in the near future.”

Barclays, Morgan Stanley and Mitsubishi UFG ran the trade.

DEAL STEPS

* Final terms: EUR750m at MS+25. Books closed around EUR1.2bn at final spread. Allocs and pricing later this pm. MS is B&D. (12:25pm)

* Books around EUR1bn and subject at noon. Guidance MS+25/+30 for EUR500m-750m deal. (11:23am)

* IPTs MS+35 area, benchmark size, pricing today. Due 13 Dec 2024, pay 13 Dec, EMTN docs, German law, Lux listing, 1k/1k denoms, Reg S bearer. UoP: GCP. MS is B&D. (8:39am)

Deutsche Telekom International Finance BV, guaranteed by Deutsche Telekom AG (Ticker: DT, Country: DE), expected ratings Baa1/BBB+/BBB+ (all stable), has mandated Barclays, MS and MUFG for a 7yr senior unsecured euro benchmark. (8:39am) (Reporting by Pauline Renuad, editing by Sudip Roy, Julian Baker)

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