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DT raises $14.5B in bonds
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June 28, 2000: 8:40 a.m. ET
Deutsche Telekom increases record issue, still can't satisfy demand
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LONDON (CNNfn) - Deutsche Telekom AG, Europe's biggest phone company, on Wednesday sold $14.5 billion in bonds, the world's biggest ever corporate debt issue, to fund the acquisition of third-generation mobile-phone licenses and to repay other borrowings.
Germany's dominant telephone operator increased the size of its bond sale at the last minute, adding another $500 million in bonds to meet demand from lenders. Still the issue was oversubscribed.
"We have seen demand for up to $24 billion," chief financial officer Dr. Karl-Gerhard Eick told CNNfn. "The issue has been a great success, and as we have told our investors, we will use the money to restructure debt and pay for [advanced mobile-phone] licenses."
The eight portions of the sale include bonds denominated in currencies other than dollar, such as euros, yen and pounds, maximizing their appeal to the global investment community. It was the first time the company had sold dollar-denominated bonds.
The record issue creates a bond that will act as a benchmark for interest rates in the corporate bond market, because of its size and multiple denominations, analysts have said.
The company increased the issue from an initial target of $8 billion. Under the terms of a filing with the U.S. Securities and Exchange Commission, the Bonn-based telecommunication giant had the capacity to increase its sale to as much as $15 billion.
Chief Executive Ron Sommer has indicated that the company is back on the acquisition trail after 12 months of discord. In the past year it has lost a takeover battle for Telecom Italia and fallen out with its previous international partners, France Telecom SA and Sprint Corp. It has highlighted expansion by takeover in the United States as one of its priorities.
Eick declined to comment on speculation that Deutsche Telekom will consider an offer for Sprint (FON: Research, Estimates) after WorldCom (WCOM: Research, Estimates) withdrew its application to the EU for permission to acquire Sprint.
Deutsche Banc Alex. Brown, a unit of Deutsche Bank AG (FDBK), Goldman Sachs & Co. (GS: Research, Estimates), and Morgan Stanley, Dean Witter & Co. (MDWS: Research, Estimates), are lead underwriters for the Telekom bond issue. 
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Deutsche Telekom
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