Orange's Strategic Move with New Euro-Denominated Hybrid Notes

Orange's Intent to Issue Euro-Denominated Hybrid Notes

Orange S.A. is gearing up for a significant step in its financial strategy by announcing its intention to issue a new series of Euro-denominated hybrid notes while also launching a tender offer for some of its outstanding hybrid notes.

The New Notes: Details and Expectations

The upcoming issuance involves undated deeply subordinated fixed-to-reset rate notes, scheduled to have a first call date on June 24, 2032. The expected pricing announcement for these notes will be revealed soon, anticipated to be on Euronext Paris, reflecting Orange's commitment to providing competitive financial instruments.

Rating and Structure of the New Notes

Market analysts expect that leading rating agencies will assign the New Notes a rating of BBB-/Baa3/BBB- (S&P, Moody's, Fitch). Additionally, these notes will feature an equity content of 50%, showcasing Orange’s robust capital management strategy.

Tender Offer: What It Means for Investors

In conjunction with the new notes issuance, Orange is launching a tender offer aimed at repurchasing its existing hybrid notes, specifically targeting:

• €1.25 billion Undated 12 Year Non-Call Deeply Subordinated Fixed to Reset Rate Notes, with an outstanding amount of €1.1 billion.
• €500 million Undated 7.5 Year Non-Call Deeply Subordinated Fixed to Reset Rate Notes.

This strategic buyback allows holders to sell existing notes before the first reset date, with opportunities for them to secure a priority position in acquiring the newly issued notes.

Investor Opportunities and Next Steps

The tender offer is designed not just for structural adjustments but also to provide attractive options for investors looking to optimize their holdings within Orange's hybrid portfolio. The acceptance period ends at 4:00 PM Paris time on June 19, 2025, with results published the following day.

Strengthening Financial Position and Market Presence

This dual initiative illustrates Orange's approach to managing its debt structure proactively while reinforcing its competitive edge in the telecommunications market.

About Orange: A Leader in Telecommunications

Established as a major telecommunications operator worldwide, Orange has reported revenues of 40.3 billion euros for 2024 and employs over 125,800 people globally. Their total customer base reached 294 million by March 2025, underscoring Orange's significant market presence.

Conclusion: Looking Ahead for Orange

As Orange moves forward with these plans, investors and market observers will be watching closely. The issuance of new hybrid notes combined with a tender offer demonstrates Orange's resilience and strategic foresight in maintaining its leadership in the telecommunications sector. With a focused approach, the company aims to enhance its service quality and operational efficiency under its strategic plan, "Lead the Future." Orange is listed on Euronext Paris under the symbol ORA.

Frequently Asked Questions

What are the new Euro-denominated hybrid notes?

These are undated deeply subordinated notes that Orange intends to issue, with the first call date scheduled for June 24, 2032.

What is the purpose of the tender offer?

The tender offer enables investors to repurchase existing hybrid notes before their reset dates and potentially allocate new notes.

When does the tender offer expire?

The tender offer will expire at 4:00 PM Paris time on June 19, 2025.

How do these financial moves impact investors?

They provide opportunities for portfolio optimization and participation in upcoming financial instruments, reflecting positive capital management.

What is the significance of the rating assigned to the new notes?

A rating of BBB-/Baa3/BBB- indicates a stable credit profile, which enhances investor confidence in the new issuance.

About The Author

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