The Americas: Telefonica's Liquidity Attracts Fund Managers
Platt, Gordon, Global Finance
Christian Starck waxes poetic when he discusses the exchange-listed ADR program of Madrid-based Telefonica, the leading communications service provider among Spanishand Portuguesespeaking populations. "It's just wonderful-a beautiful, liquid ADR," says Starck, director of product management at Citibank Depositary Receipt Services.
Telefonica was the world's ninth most actively traded ADR last year in dollar terms. "Telefonica's ADR market is deep enough so that funds can off-load when they rebalance," Starck says. "Otherwise funds won't touch an ADR." He notes that Telefonica successfully completed a global bond issue for a total of 6.8 billion euros last year, which underscored its solid reputation in the international financial markets.The offering attracted strong investor demand and was four times oversubscribed.
"Telefonica is a well-- managed company with a carefully thought out plan to be global," Starck says. Its wireless arm, Telefonica Moviles, went public on November 22 2000, issuing 90 million ADRs and raising $840 million as part of a $3.2 billion global stock sale. Telefonica Moviles will use the proceeds to buy licenses for 3G mobile phone service across Europe. The company has 21 million mobile customers in Spain and Latin America and has licenses to operate in Austria, Germany, and Italy. It also has agreed to acquire Motorola's Mexican wireless operator, Propel. …