Verizon Plans $49 Billion Bonds in Largest Company Offering Ever

Wednesday, 11 Sep 2013 09:34 AM

 

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Sept. 11 (Bloomberg) -- Verizon Communications Inc. is planning $49 billion of bonds in an eight-part offering as soon as today that would be the biggest company debt sale ever, according to a person with knowledge of the transaction.

The second-biggest U.S. telephone carrier is selling fixed- rate debt with maturities ranging from three to 30 years as well as two portions of floating-rate securities, said the person, who asked not to be identified because terms aren’t set. Verizon is poised to pay a premium for the size of its sale, marketing a 10-year portion with a relative yield of 47 basis points more than investors demand to own bonds with similar maturities and BBB ratings, according to data compiled by Bloomberg.

“They have a huge deal to get done and they want to make sure it gets done, so that’s why you’re seeing the wider concession,” Scott Colyer, chief executive officer of Monument, Colorado-based Advisors Asset Management, which oversees about $11.6 billion in assets, said in a telephone interview.

The deal, which is about the size of all outstanding obligations of the Slovak Republic, is helping to fund New York- based Verizon’s buyout of partner Vodafone Group Plc.’s 45 percent stake in the largest and most profitable U.S. wireless carrier, Verizon Wireless. The sale is more than double the previous issuance record of $17 billion from Apple Inc. sold in April.

Topping Record

Verizon may sell $4.25 billion of three-year fixed-rate notes to yield 165 basis points more than similar-maturity Treasuries; $4.75 billion of five-year debt may pay a spread of 190 basis points; $4 billion of seven-year securities may yield 215 basis points more than benchmarks; $11 billion of 10-year debt may pay 225 basis points; $6 billion of 20-year notes may yield 250 basis points; and $15 billion of 30-year bonds may pay about 265, according to the person.

The company may also sell $2.25 billion of three-year and $1.75 billion of five-year floating-rate notes, said the person.

The offering is being managed by Barclays Plc, Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley, Verizon said in regulatory filings.

--With assistance from Sarika Gangar in New York. Editors: John Parry, Shannon D. Harrington

To contact the reporter on this story: Matt Robinson in New York at mrobinson55@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net;

© Copyright 2014 Bloomberg News. All rights reserved.

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