Verizon Communications has smashed the record for the largest corporate bond ever issued after selling US$49bn notes in an eight-tranche offering.
The proceeds will be used to refinance its US$61bn bridge facility it used to agree its US$130bn…
Verizon Communications has smashed the record for the largest corporate bond ever issued after selling US$49bn notes in an eight-tranche offering.
The proceeds will be used to refinance its US$61bn bridge facility it used to agree its US$130bn acquisition of Vodafone’s 45% stake in their JV Verizon Wireless.
The offering consisted of a mixture of floating and fixed-rate notes with maturities ranging between three and 30 years.
It sold US$4bn in floating-rate notes split between two tranches with US$2.25bn notes due 2016 and US$1.75bn notes due 2018. The 2016 and 2018 notes carry a coupon of average three-month Libor plus 1.53% and plus 1.75% respectively, and both priced at 100.
The remaining six tranches carry fixed rates. Verizon sold US$4.25bn in 2.5% 2016 notes priced at 99.62; US$4.75bn in 3.65% 2018 notes priced at 99.65; US$4bn in 4.5% 2020 notes priced at 99.47; US$11bn in 5.15% 2023 notes priced at 99.23; US$6bn in 6.4% 2033 notes priced at 99.15; and US$15bn in 6.55% 2043 priced at 99.13.
The offering, which reportedly generated US$101bn in demand, was led by Barclays, BofA Merrill Lynch, JP Morgan and Morgan Stanley.
Citigroup, Credit Suisse, Mitsubishi UFJ, Mizuho, RBC Capital Markets, RBS, Wells Fargo, Deutsche Bank and Santander also acted as underwriters on the offering.
Verizon had planned to offer up to US$10bn in sterling and euro bonds but, following the high level of demand, decided to issue all of the notes in dollars. This was so it could price all of its planned corporate bonds ahead of a Federal Reserve meeting next week which could raise the cost of borrowing.
If its acquisition of Vodafone’s stake does not complete by 2 September 2014 or if the deal is terminated, Verizon will be obliged to redeem all of the notes at 101% of the principal amount.
In addition to the notes, it is also looking to secure a US$14bn loan, which would take the amount of debt raised to US$63bn to refinance the US$61bn bridge facility.
