Swisscom issues 4 billion euros of bonds

Swisscom issues 4 billion euros of bonds
Swisscom issues 4 billion euros of bonds
Optical fiber and mobile network: the winning duo?

Swisscom announced on Thursday the issue of 4 billion euros of bonds to finance the acquisition of Vodafone Italia. This strategic operation aims to strengthen Swisscom’s position in the transalpine telecoms market to sustainably generate copious profits in Italy, as for Sunrise (UPC) or Salt in Switzerland.

The acquisition of Vodafone Italia is expected to enable Swisscom to expand its service portfolio and increase its customer base in Italy. By integrating the infrastructures of Vodafone Italia in addition to those of Fastweb, Swisscom hopes to offer slightly more competitive services in a very dynamic market.

Guaranteed financing

Swisscom was advised by Deutsche Bank to develop a suitable financial package. The bonds issued by Swisscom will be divided into several tranches. With diversified maturities, the operator wants to attract a wide range of investors and optimize financing conditions.

With these transactions, financing for the acquisition of Vodafone Italia now seems guaranteed. Additional annual interest charges are expected to be less than or equal to 250 million Swiss francs, in line with forecasts, according to a press release. Finalization of everything remains subject to regulatory approvals.

The bonds will be listed on the Luxembourg Stock Exchange, guaranteeing good conditions for the different players. Swisscom has received favorable credit ratings from rating agencies, which should boost investor confidence.

Generate cash for years!

This bond issue is part of a broader Swisscom strategy aimed at developing its presence outside Switzerland to generate maximum cash for years: this is sustainable pumping! With this acquisition, Swisscom will position itself as a more visible player in the European telecoms market.

The synergies between Vodafone Italia and Fastweb should enable economies of scale and improve the prospects of the blue giant in Italy. A former monopolist in Switzerland, Swisscom will however have to face companies with a much more “dynamic” DNA, such as Iliad Italy, whose parent company is used to combating the arrogance of historic operators.


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