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The Dutch telecoms company tightened pricing to guidance of 6.375% area on its capped EUR 500m hybrid bond from 6.75%-area initial price thoughts, as the order book swelled to over EUR 2.75bn by the end of the morning, according to Bond Radar (www.bondradar.com).

The bonds are callable from 21 September 2027. The coupon resets on the first reset date (21 December 2027) and every five years after that. There is a 25bp step-up on 21 December 2032 and an additional 75bp step-up on 21 December 2047. Expected equity credit is 50%.

“KPN’s business risk profile mainly benefits from the telecom industry’s low cyclicality and the company’s strong positions in mobile (ranked first) and broadband (second) in the Netherlands, together with stable EBITDA and debt levels,” said lead analyst Jacques de Greling.

“We do not expect any significant changes in market share as the Dutch telecom market is mature and concentrated. KPN’s profitability is slightly above that of its largest European peers in their respective domestic markets although geographical diversification is limited, with telecom revenues generated entirely in the Netherlands.”

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