Verizon prices $5.5B waterfall notes

Verizon Communications (NYSE:VZ) has priced its cash tender offer for up to US$5.5bn of waterfall debt. The waterfall notes are one of three concurrent but separate offers first announced by the US mobile operator on 4 March.

Verizon Communications (NYSE:VZ) has priced its cash tender offer for up to US$5.5bn of waterfall debt.

The waterfall notes are one of three concurrent but separate offers first announced by the US mobile operator on 4 March.

Verizon said in a statement that the value of all waterfall notes validly tendered by the 18 March early participation deadline exceeded the cap. As such, all 13 series of notes with an acceptance priority level higher than 14 have been accepted for purchase, using a proration factor of about 70.9%, while those with a lower priority have not.

Verizon accepted US$63.3m of top priority, 8.95% notes due 2039, with bondholders receiving US$1,506.50 per US$1,000 in total consideration. For full details of notes accepted, see the table below.

Holders of notes accepted for purchase will also receive an early tender premium and accrued and unpaid interest. Payment is expected to be made on about 4 April.

On 4 March, Verizon launched three cash tender offers to buy back up to US$11.6bn of debt issued by itself and its subsidiaries. Specifically, it tendered US$5.1bn for “Group 1” notes due in 2016 and 2019; US$2.5bn for “Group 2” notes due between 2019 and 2045; and up to US$4bn for “waterfall” notes. Following early participation results, the company increased the waterfall component to US$5.5bn.

All three offers are subject to certain conditions, including the completion of Verizon’s sale of local exchange and related business assets in California, Florida and Texas to rural operator Frontier Communications and the receipt of at least US$9.5bn of the US$10.5bn 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 $5 billion 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 totaled US$110.2bn.

Verizon waterfall notes accepted for purchase

Source: Verizon Communications 

Verizon Digital Media Services buys Volicon

Verizon Digital Media Services, a unit of Verizon, has agreed to buy Volicon, a broadcast monitoring and archive company, for an undisclosed amount.

Verizon Digital Media Services said, in a statement, that the acquisition would further establish it as a key provider of technology and media services to the broadcast and online video industry.

“With the shift to all things digital, mobile and video, we are committed to enabling all creators, publishers and broadcasters to bring their content to the internet with the highest quality and a trusted partner globally,” Bob Toohey, Verizon Digital Media Services president, said.

Volicon was founded in 2005 by Eli Warsawski, Julius Perl and Yehuda Brand.

Verizon Digital Media Services has been operating under the AOL umbrella ever since Verizon bought the media company for US$4.4bn in June last year.