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UPDATE 1-Telefonica revives peripheral bond push

(Adds background) By Natalie Harrison

LONDON, Oct 5 (IFR) - Spain's Telefonica SA, rated Baa2/BBB/BBB+, has opened books on its second bond deal in a month looking to emulate the success of its EUR750m bond that priced in September as a wave of corporate issuers ended a gridlock for peripheral issuers.

Telefonica on Friday said it had mandated BayernLB, BNP Paribas, Citi, Commerzbank, MUSI and SG CIB for a new January 2020 euro benchmark issue and set initial price thoughts at mid-swaps plus 340-350bp.

One banker involved in the deal estimated fair value on the new bond at 320bp, which indicated a new issue premium of around 20-30bp based on the initial guidance.

That is broadly in line with the 25bp concession offered by Telefonica on its EUR750m five-year deal which priced on September 5 at mid-swaps plus 485bp and has since rallied to 304bp over mid-swaps.

Books on that deal reached EUR7bn.

(Reporting by Natalie Harrison, Editing by Helene Durand)

((helene.durand@thomsonreuters.com)(+44 207 542 3469)(Reuters Messaging: helene.durand.reuters.com@reuters.net))

Keywords: TELEFONICA/BOND

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