US telco Verizon Communications has filed a preliminary prospectus for a bond sale this week which is touted to become the largest corporate offering on record.
Verizon will use the proceeds to finance its acquisition of Vodafone’s 45% stake in…
US telco Verizon Communications has filed a preliminary prospectus for a bond sale this week which is touted to become the largest corporate offering on record.
Verizon will use the proceeds to finance its acquisition of Vodafone’s 45% stake in Verizon Wireless for US$130bn.
In an SEC filing Verizon revealed details of a six-tranche dollar-denominated offering consisting of floating notes and fixed notes. The interest rate on the floating paper will be tied to Libor.
The New York-based telco currently has a US$61bn bridge facility for that deal but is looking to secure permanent financing quickly, which will include as much as US$50bn in corporate bonds according to multiple reports. Verizon may look to raise around US$20bn of that this week, passing the previous US$17bn record set by Apple in April for the largest-ever bond sale.
Over the weekend reports had suggested that Verizon may offer maturities of up to 100 years. However for the US$20bn offering, a 30-year tenure is being reported. The notes will likely be priced tomorrow, reports said.
As expected Barclays, BofA Merrill Lynch, JP Morgan and Morgan Stanley are joint bookrunners. The banks provided the bridge and were therefore assumed to be managing the more lucrative bond offering.
Citigroup, Credit Suisse, Mitsubishi UFJ, Mizuho, RBC Capital Markets, RBS and Wells Fargo are passive bookrunners on the offering.
Early reports suggested that order books on the offering had already passed the US$40bn mark.
In addition Verizon has priced a US$14bn loan which it will also use to finance the Vodafone transaction, according to a Reuters report citing unnamed sources.
The US$14bn is split between a US$6bn three-year term loan, a US$6bn five-year term loan and a US$2bn revolver. The term loans priced at Libor plus 137.5 basis points and Libor plus 150 basis points respectively.
The revolver pays 10 basis points on undrawn amounts and Libor plus 125 basis points on what is drawn.
Barclays, BofA Merrill Lynch, JP Morgan and Morgan Stanley are also working on the loan, the report said.
