Verizon lifts waterfall tender cap to $4.5 billion, prices offer

By Marisa Wong

Morgantown, W.Va., April 30 – Verizon Communications Inc. announced it increased the waterfall cap of its cash tender offers for notes from 15 series and announced the early participation results along with pricing.

Verizon said it increased the waterfall cap to $4.5 billion from $3 billion.

According to a company announcement, all notes tendered by 5 p.m. ET on April 29, the early participation date, that have an acceptance priority level of 1 have been accepted for purchase; those with an acceptance priority level lower than 2 will not be accepted; and those with an acceptance priority level of 2 have been accepted for purchase using a proration factor of 47.96%.

Specifically, Verizon will accept all $3,191,596,000 of 5.012% notes due 2054 and $1,308,404,000 of the $2,729,095,000 of 4.672% notes due 2055 tendered as of the early participation date.

The total consideration is $1,126.28 for each $1,000 principal amount of 2054 notes and $1,067.28 for each $1,000 principal amount of 2055 notes, along with accrued interest to but excluding the settlement date, which will be May 1.

Because the aggregate amount of notes tendered by the early participation date exceeded the waterfall cap, there will be no final settlement date, and no notes tendered after the early deadline will be accepted for purchase.

As announced on April 16, the company offered to repurchase its notes from 15 series under separate cash tender offers.

As of the early participation date, holders had tendered the following notes, listed in order of acceptance priority from levels 1 to 15:

• $3,191,596,000, or 66.97%, of the $4,765,740,000 5.012% notes due 2054, with pricing set using the applicable Treasury plus a spread of 137 basis points;

• $2,729,095,000, or 60.91%, of the $4,480,535,000 4.672% notes due 2055, with pricing set using the applicable Treasury plus 136 bps;

• $2,302,770,000, or 53.34%, of the $4,317,480,000 4.862% notes due 2046. Pricing would have been set using the applicable Treasury plus 122 bps;

• $2,012,272,000, or 56.92%, of the $3,535,114,000 5.012% notes due 2049. Pricing would have been set using the applicable Treasury plus 125 bps;

• $2,532,692,000, or 55.69%, of the $4,548,159,000 4.522% notes due 2048. Pricing would have been set using the applicable Treasury plus 120 bps;

• $604,062,000, or 42.22%, of the $1,430,580,000 5.5% notes due 2047. Pricing would have been set using the applicable Treasury plus 128 bps;

• $57,664,000, or 5.66%, of the $1,018,898,000 6.55% notes due 2043. Pricing would have been set using the applicable Treasury plus 135 bps;

• $488,491,000, or 38.34%, of the $1,274,054,000 4.125% notes due 2046. Pricing would have been set using the applicable Treasury plus 114 bps;

• $442,703,000, or 27.97%, of the $1,582,870,000 4.812% notes due 2039. Pricing would have been set using the applicable Treasury plus 109 bps;

• $108,393,000, or 32.58%, of the $332,665,000 6.4% notes due 2038. Pricing would have been set using the applicable Treasury plus 130 bps;

• $1,005,373,000, or 36.62%, of the $2,745,559,000 4.272% notes due 2036. Pricing would have been set using the applicable Treasury plus 101 bps;

• $196,634,000, or 27.67%, of the $710.67 million 4.75% notes due 2041. Pricing would have been set using the applicable Treasury plus 117 bps;

• $1,087,883,000, or 38.56%, of the $2,821,045,000 5.2% notes due 2037. Pricing would have been set using the applicable Treasury plus 108 bps;

• $291,269,000, or 28.94%, $1,006,378,000 3.85% notes due 2042. Pricing would have been set using the applicable Treasury plus 109 bps; and

• $11,907,000, or 2.38%, of the $501,152,000 5.85% notes due 2035. Pricing would have been set using the applicable Treasury plus 113 bps.

In each case, the applicable Treasury is the 3.375% Treasury note due Nov. 15, 2048.

Pricing was set at 10 a.m. ET on April 30.

For each series, the total consideration included an early tender premium of $50 per $1,000 principal amount of notes tendered by the early deadline.

Tenders may no longer be withdrawn.

The offers are set to expire at 11:59 p.m. ET on May 13.

As previously announced, notes accepted for purchase may be subject to proration if the waterfall tender cap is exceeded. All notes, regardless of acceptance priority level, that are tendered by the early deadline have priority over any notes tendered after the early deadline and at or prior to the expiration date.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), Goldman Sachs & Co. LLC (800 828-3182 or 212 577-1452), Mizuho Securities USA LLC (866 271-7403 or 212 205-7736) and Wells Fargo Securities at (866 309-6316 or 704 410-4756) are the lead dealer managers for the offers.

Standard Bank plc, Loop Capital Markets LLC, TD Securities (USA) LLC, Blaylock Van, LLC, C.L. King & Associates, Inc. and MFR Securities, Inc. are co-dealer managers.

Global Bondholder Services Corp. (866 470-4300 or 212 430-3774) is the information agent for the offers.

Verizon is a New York City-based telecommunications company.

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