Peett schreef op 11 september 2013 12:11:
Deutsche Bank AG (DBK) sold the largest credit-linked notes tied to European phone companies in three months as the busiest period for mergers and acquisitions since 2007 focuses investor attention on telecoms debt.
Germany’s biggest bank issued 50 million euros ($66.2 million) of five-year structured notes linked to Portugal Telecom SGPS SA, Royal KPN NV, Telecom Italia SpA (TIT), Telefonica SA (TEF) and Telekom Austria AG (TKA), according to data compiled by Bloomberg. Investors in the securities will receive three percentage points more than the three-month euro interbank offered rate and will suffer losses if either the bank or the phone companies default.
Nick Bone, a spokesman for Deutsche Bank in London, declined to comment on the bank’s structured notes.
Verizon Communications Inc. (VZ)’s $130 billion buyout of Vodafone Group Plc (VOD)’s stake in its wireless venture is leading more than $250 billion of tech and telecoms takeovers in the third quarter, according to data compiled by Bloomberg. Telefonica, which is debuting hybrid bonds to help buy a controlling stake in Royal KPN’s E-Plus German wireless unit, is among companies looking to consolidate as data use demands more expensive networks and regulators restrict fees.
A bond sale of as much as $49 billion from Verizon for the Vodafone deal saw U.S. telecoms bonds lose an average 2.7 percent this month as investors make room for the eight-part offering, according to Bank of America Merrill Lynch’s U.S. Telecommunications Index. European phone company debt is proving more resilient, losing 0.7 percent in the period, according to Bank of America Merrill Lynch’s Euro Corporate Index.
Under Pressure
“The reason that European telecoms spreads have been less impacted than U.S. credits is that the European telecoms sector is more evenly distributed across issuers whereas the U.S. market is far more concentrated,” said Sam Morton, a credit analyst at Mizuho International Plc in London. “It seems likely that European telecoms spreads will come under pressure if Verizon attempts to issue a sizable transaction in the euro market.”
Deutsche Telekom AG (DTE) and Telefonica, the two largest constituents in the 27-member Bank of America Merrill Lynch Euro Telecommunications Index, together comprise 25.73 percent, whereas the comparative U.S. index, which also has 27 members, is dominated by bonds of Verizon and AT&T Inc. (T), which make up 35.7 percent of the gauge.
Telecom debt yields an average 2.63 percent in Europe, the highest since August 2012, according to Bank of America Merrill Lynch.
Structured notes package debt with derivatives to offer customized bets to investors while earning fees and raising money. Derivatives are contracts whose value is based on stocks, bonds, currencies and commodities.
To contact the reporter on this story: Alastair Marsh in London at
amarsh25@bloomberg.netTo contact the editor responsible for this story: Shelley Smith at
ssmith118@bloomberg.net