By Angela McDaniels
Tacoma, Wash., March 17 - Verizon Communications Inc. determined the prices it will pay in its previously announced tender offer for $8.2 billion of notes issued in eight series, according to a company news release.
The purchase prices per $1,000 principal amount of notes, reference yields and fixed spreads are noted in the table below.
The following notes are covered by the tender offer, and they are listed in order of acceptance priority level:
• Cellco Partnership and Verizon Wireless Capital LLC's $1 billion 8.5% notes due 2018;
• Verizon's $1.3 billion outstanding 8.75% notes due 2018;
• Alltel Corp.'s $300 million outstanding 7% debentures due 2016;
• Verizon's $1.25 billion outstanding 5.55% notes due 2016;
• Verizon's $750 million outstanding 5.5% notes due 2017;
• GTE Corp.'s $600 million outstanding 6.84% debentures due 2018;
• Verizon's $1.5 billion outstanding 6.1% notes due 2018; and
• Verizon's $1.5 billion outstanding 5.5% notes due 2018.
There are $2.25 billion of the 8.5% notes outstanding, but only $1 billion of those notes are available to be tendered in the offer because Cellco Partnership and Verizon Wireless Capital issued a redemption notice for $1.25 billion of the notes on Feb. 28.
The tender offers began on March 10 and were scheduled to end at 5 p.m. ET on March 17.
The prices were set by reference to the bid-side price of a reference U.S. Treasury security at 2 p.m. ET on March 17 plus a fixed spread.
The reference Treasury used was the 1.5% Treasury note due Feb. 28, 2019 for the 8.5% notes, 8.75% notes, 6.84% debentures, 6.1% notes and 5.5% notes due 2018, the 0.25% Treasury note due Feb. 29, 2016 for the 7% debentures and 5.55% notes and the 0.625% Treasury note due Feb. 15, 2017 for the 5.5% notes due 2017.
The company also will pay accrued interest up to but excluding the settlement date.
The offers are conditioned on financing. If the proceeds of the financing are not enough to purchase all of the notes tendered, the company will purchase notes in order of priority acceptance level.
As previously reported, Verizon priced $4.5 billion of senior notes (Baa1/BBB+/A-) in five tranches on March 10.
The dealer managers are Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106 collect), Mitsubishi UFJ Securities (USA), Inc. (212 405-7481 collect), RBC Capital Markets, LLC (877 381-2099 or 212 618-7822 collect) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760 collect). The information agent and the depositary is Global Bondholder Services Corp. (866 470-3800 or 212 430-3774 collect).
Verizon is a New York City-based telecommunications company.
Verizon tender offer pricing
| Notes | Reference yield | Fixed spread | Purchase price
|
| 8.5% notes due 2018 | 1.554% | 60 bps | $1,279.63
|
| 8.75% notes due 2018 | 1.554% | 60 bps | $1,288.35
|
| 7% debentures due 2016 | 0.351% | 30 bps | $1,125.26
|
| 5.55% notes due 2016 | 0.351% | 25 bps | $1,093.62
|
| 5.5% notes due 2017 | 0.728% | 30 bps | $1,133.22
|
| 6.84% debentures due 2018 | 1.554% | 25 bps | $1,196.85
|
| 6.1% notes due 2018 | 1.554% | 20 bps | $1,170.07
|
| 5.5% notes due 2018 | 1.554% | 5 bps | $1,146.91
|
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