Verizon Communications has agreed a US$12bn term loan credit agreement from a syndicate of banks led by JPMorgan.
The proceeds from the loans will be used to help finance Verizon’s US$130bn buyout of Vodafone’s 45% stake in their US mobile JV…
Verizon Communications has agreed a US$12bn term loan credit agreement from a syndicate of banks led by JPMorgan.
The proceeds from the loans will be used to help finance Verizon’s US$130bn buyout of Vodafone’s 45% stake in their US mobile JV Verizon Wireless.
The operator took out a US$61bn bridge facility to agree the deal and has already refinanced the majority of that figure by selling US$49bn notes in September – the largest corporate bond in history.
Half of the loans under the credit agreement have a maturity of three years, and the other half expires in five years.
Verizon has the option to accept interest rates at either the base rate – which is the federal funds rate plus 0.5%, subject to a floor of Libor plus 1% – or Libor, plus a margin to be determined by reference to Verizon’s credit ratings.
For the three-year facilities, the margins range from 0.125% to 0.875% for base rate loans and 1.125% to 1.875% for Libor loans.
For the five-year facilities, the margins range from 0.25% to 1% for base rate loans and 1.25% to 2% in the case of Libor loans.
JP Morgan was administrative agent and global coordinator. Morgan Stanley was also a global coordinator and a syndication agent, while BofA Merrill Lynch and Barclays were documentation agents.
JP Morgan, Morgan Stanley, Barclays and BofA Merrill Lynch were all joint lead arrangers and joint bookrunners. The same four banks provided the bridge and led the record-breaking bond offer.
The Vodafone deal should be voted on by shareholders from the respective companies before the end of January 2014. All regulatory approvals are expected to be received before the end of March to allow the deal to close.
