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BT out with dual-tranche bond
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The UK-based media and telecoms group went out this morning with a dual-tranche senior unsecured trade in benchmark size. Final pricing for the EUR 500m five-year tranche was 90bp over mid-swaps (against initial price thoughts of MS+95bp area), according to Bond Radar (www.bondradar.com). The spread on the EUR 500m 10-year was fixed at MS+130bp; IPTs were 130bp-area over. Shortly before books closed, combined demand was above EUR 1.3bn.
“BT’s business risk profile is driven by its leading position in the mobile and fixed markets in the UK,” said Rohit Nair, lead analyst for BT. "The company has had a stable market share in both segments in recent years despite facing a strong competitive environment. In addition, BT is the largest integrated UK player, which we view as a clear competitive advantage given the convergence trend of offering bundles that include mobile and broadband.”
The UK mobile telecom market is widely seen as mature versus its declining fixed voice services market. This hampers sales in BT’s consumer segment and profitability in the enterprise segment. BT’s rating is supported by its ownership of the legacy network and its dominance in the very profitable, regulated wholesale services.
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