Spain ‘s Telefonica gets €8bn loan for Vivo

Up to EUR10 billion worth of commitments were received from banks to the financing that's being co-ordinated by Citigroup, one of the people said.Up to EUR10 billion worth of commitments were received from banks to the financing that's being co-ordinated by Citigroup, one of the people said.

Spain 's Telefonica gets €8bn loan for Vivo

Spanish telecommunications company Telefonica SA has agreed EUR8 billion in loan financing with banks, part of which is to back its acquisition of Portugal Telecom SGPS SA's stake in Brazilian mobile company Vivo, said people familiar with the situation Wednesday.

Up to EUR10 billion worth of commitments were received from banks to the financing that's being co-ordinated by Citigroup, one of the people said.

The financing is divided into a EUR5 billion three-year loan priced at 65 basis points over Euribor and a EUR3 billion five-year loan priced at 80 basis points over Euribor, a second person said.

The EUR5 billion loan is to finance the EUR7.5 billion offer for Vivo, while the EUR3 billion will be used to refinance debt that matures in the short term, people previously told Dow Jones Newswires.

Telefonica said Wednesday that it has reached a preliminary agreement with Portugal Telecom to purchase the Portuguese company's stake in Vivo Participacoes SA, Brazil's leading mobile operator.

Telefonica has sweetened its offer for PT's stake in Vivo to EUR7.5 billion from EUR7.15 billion, to be paid in installments, people familiar with the situation told Dow Jones Newswires. Senior executives of both Iberian telecommunications companies reached a preliminary, verbal agreement late Tuesday, one of the people said.

Their respective boards are set to hold separate meetings to discuss and ratify Telefonica's new offer later Wednesday, Telefonica said in a filing with regulators.

The two companies have fought hard for Vivo since Telefonica's first bid in May. The new bid is the third time Telefonica has raised its offer for the stake in Vivo, and it is almost as high as Portugal Telecom's market capitalization of close to EUR9.37 billion.






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