TeliaSonera forced to widen bond yield spreads
by Brian Turner
TeliaSonera, the dominant telecommunications provider in the Nordic region, is having trouble regarding its first international bond issue since its 2003 merger.
It was forced on Thursday to cancel a planned €500m 15-year bond and to pay a much higher interest rate on shorter-term bonds.
It had to widen the yield spread on a €750m 10-year bond to 78 basis points, from an initial price guidance of 65 basis points, and it was forced to pay a spread of 48 basis points, up from 43 basis points, on a €500 seven-year bond.
The total amount of capital raised from the bond issue fell far short of expectations. The original goal of €1.5 bn was cut to €1.25 bn.
On Tuesday, the company released a first quarter earnings report that fell short of expectations and warned that rivals were expected to provide serious competition in the upcoming quarters.
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