Verizon Communications has launched three cash tender offers to buy back up to US$11.6bn of debt. The concurrent but separate offers involve 34 tranches of notes issued by the company and its subsidiaries.
Verizon Communications (NYSE:VZ) has launched three cash tender offers to buy back up to US$11.6bn of debt.
The concurrent but separate offers involve 34 tranches of notes issued by the company and its subsidiaries, the New York-based telecoms operator said in a statement.
Specifically, it has tendered US$5.1bn for “Group 1’ notes due in 2016 and 2019; US$2.5bn for “Group 2” notes with maturities between 2019 and 2045; and up to US$4bn for “waterfall” notes. Securities carry coupons as high as 8.95%.
Investors have until 1 April to participate in the tender, however, those who do so before 5pm New York time on 17 March will receive an early tender premium. Waterfall notes tendered early will have priority over those tendered later.
Payment for notes accepted for purchase will be made “promptly” after the expiration time, the company said.
The offer is subject to conditions including the completion of the sale of local exchanges and related assets in California, Florida and Texas to rural operator Frontier Communications and Verizon’s receipt of at least US$9.5bn of the US$10.5bn purchase price in cash at closing.
Verizon will use proceeds from the sale to fund the purchases, according to a Verizon spokesperson.
The company agreed the Frontier deal in February 2015, when it also inked a US$5bn sale-and-leaseback deal with American Tower.
Verizon has mandated Goldman Sachs, RBC Capital Markets and Santander Investment Securities to act as lead dealer managers for the offers and lead solicitation agents for the consent solicitation.
Mitsubishi UFJ Securities, CastleOak Securities, Drexel Hamilton, Samuel A Ramirez and Siebert Brandford Shank are acting as co-dealer managers and co-solicitation agents. Global Bondholder Services will act as the information agent and depositary for the offers and consent solicitation.
The telco reported revenue of some US$132bn for FY 2015. Its net debt at the end of last year totalled US$110.2bn.
