Background on Telefónica and its Significance
Telefónica, a prominent Spanish telecommunications company, has announced its voluntary withdrawal from the New York Stock Exchange (NYSE) after almost 40 years of presence. The company submitted the necessary form to the Securities and Exchange Commission (SEC) in the United States, initiating a process that will see it leave Wall Street within the coming 10 days.
Telefónica’s Journey on Wall Street
Telefónica first appeared on the NYSE on June 12, 1987, becoming the first Spanish company to list on Wall Street. Over nearly four decades, it established a significant presence in the US capital market.
Details of Telefónica’s Withdrawal
On December 17, Telefónica announced its intention to start the procedure for voluntarily excluding its American Depository Shares (ADS) from trading on the NYSE. Each ADS represents one ordinary share of Telefónica, traded through American Depository Receipts (ADR).
The company clarified that it does not plan to list, trade, or register the ADS on any other US securities market. Instead, holders of ADS will have the option to exchange them for ordinary shares trading on Spanish stock exchanges. Telefónica intends to transition its current ADR program into a Level I ADR program, allowing current ADS holders to maintain and facilitate trading of these securities in the over-the-counter US market.
Impact on Telefónica’s Bonds
Alongside the ADS withdrawal, Telefónica has also initiated a process to cease trading of its senior fixed-rate bonds maturing in 2027, 2036, 2038, 2047, 2048, and 2049 on the NYSE.
The company plans to seek admission for these bonds on Euronext Dublin, as there are no plans to list them on any other US debt market.
Continued Trading of Ordinary Shares
Following the delisting and cancellation of registration in the US, Telefónica’s ordinary shares will continue to trade on the Spanish continuous market. This is where the majority of both domestic and international investors currently trade Telefónica’s ordinary shares.
Key Questions and Answers
- What does Telefónica’s withdrawal from the NYSE mean? Telefónica will no longer trade its American Depository Shares (ADS) or senior fixed-rate bonds on the New York Stock Exchange. Instead, it will transition to Euronext Dublin for its bonds and continue trading ordinary shares on the Spanish continuous market.
- Why is Telefónica leaving Wall Street after nearly 40 years? The company has not explicitly stated the reasons for its departure from Wall Street. However, it may be due to strategic shifts in their capital market presence or a desire to strengthen its position within European markets.
- How will this affect Telefónica’s investors? Investors holding ADS will have the option to exchange them for ordinary shares trading on Spanish stock exchanges. Those with senior fixed-rate bonds will see their securities cease trading on the NYSE but may continue to trade through other channels.
