In completing its first jumbo bond sale targeted mainly at the US investors, the Madrid-based former monopoly, like most of its big European rivals, is raising much of the needed cash by selling bonds.

Analysts expect the telecoms companies to sell up to $50 billion in bonds to buy third-generation licenses, which are needed to provide fast mobile Internet, data and multimedia services.

And most, if not all, of them will have to offer the US Bond investors generous yields, they said.

Telefonica's $5 billion of dollar-denominated debt attracted about $12 billion in bids, the US investors said.

The newness of its name, the size of its sale, and its better-than-average credit profile among European telecoms almost made its bonds a "must-own," they said.

"It's being a new name had to play an important role," said Mr Bob Anderson, senior investment officer at CIMCO Inc. in Madison, Wisc., where he helps manage $5 billion.

"We took a token position because we wanted the name in our books," he said. "We didn't get too aggressive because the yield spreads appeared to be getting ahead of themselves."

Indeed, the yields Telefonica offered were nearly one-tenth of a percentage point below what investors once expected.

Some investors sold Treasuries, which fell sharply on Thursday, to make room for Telefonica's higher-yielding bonds.

Telefonica sold $1.25 billion of five-year notes yielding 7.36 per cent, or 144 basis points more than similar maturity US Treasuries.