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Telecom Italia (TIM) has become the first junk-rated European company to tap debt markets after the recent banking turmoil, raising 400 million euros through a sale of a new tranche of an existing bond due in 2028.

Dogged by stiff price competition in its domestic market, TIM is seeking to restructure its operations selling its most prized asset – the landline grid – and cut its 25 billion euro debt pile.

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In January, TIM had sold 850 million euros of the 2028 bond , which carries a 6.875% coupon at par, drawing more than 2.5 billion euros in demand in its first foray into the debt market after two years.

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The latest bond sale, announced late on Monday, come after recent market turmoil triggered by the troubles of U.S. lenders Silicon Valley Bank and Signature Bank pushed up euro zone bond yields, prompting many issuers to steer clear of markets.

TIM said it has sold the new tranche of the bond at 100.75, a price which implies a 6.69% yield. That compares with a 4.4% average cost of the company’s debt, according to broker Akros.

The new debt issuance increases TIM’s average cost of debt by 5 basis points, Equita said in a research note, a figure which is in line with the broker estimate of 130 million euros of additional funding cost this year compared to 2022.

TIM would use the new bond sale proceeds to refinance upcoming debt matutiries, as it did in January.

The company still face some 3 billion euros redemptions this year. At the end of last year TIM said it had 9 billion euros of cash available, which would cover its refinancing needs until 2024. (Reporting by Sara Rossi, Anirudh Saligrama and Elvira Pollina; Editing by Valentina Za, Tomasz Janowski and Keith Weir)