By Susanna Moon
Chicago, Feb. 27 – Verizon Communications Inc. gave the results of the exchange offers for 19 outstanding series of debt securities as of Tuesday.
As reported Feb. 11, the company is offering to exchange the issues for new notes using a waterfall method, subject to a $4 billion cap on the amount of new notes that will be issued. The exchange offers also require a minimum issue of $1 billion.
Verizon will issue $4 billion of 4.016% notes due 2029, which priced at 137 basis points over the 2.625% U.S. Treasury due Feb. 15, 2029, previously increased from 130 bps over Treasuries on Feb. 20.
The exchange offers were set to remain open until 11:59 p.m. ET on March 11, previously extended from March 8.
Because the offer was oversubscribed, however, the company accepted for purchase all of the first 13 series of notes and some of the 14th series using a proration factor of 86.74%, according to a company update.
Holders had tendered the following amount of notes, listed in order of priority acceptance levels, as of the early deadline with pricing set at 11 a.m. ET on Feb. 26 for each $1,000 principal amount:
• $81,716,000 of Verizon’s $678,319,000 principal amount outstanding 3.45% notes due 2021, with pricing set at $1,014.75 using a fixed spread of 20 bps over the 2.5% U.S. Treasury note due Jan. 31, 2021 for a reference yield of 2.504% and an exchange offer yield of 2.704%;
• $182,894,000 of Verizon’s $1,102,938,000 principal amount outstanding of 4.6% notes due 2021, with pricing set at $1,037.25 based on a fixed spread of 25 bps over the 2.5% U.S. Treasury note due Jan. 31, 2021 for a reference yield of 2.504% and an exchange offer yield of 2.754%;
• $220,897,000 of Verizon’s $1,272,299,000 principal amount outstanding 3.5% notes due 2021, with pricing set at $1,019.08 based on a fixed spread of 25 bps over the 2.5% U.S. Treasury note due Jan. 31, 2021 for a reference yield of 2.504% and an exchange offer yield of 2.754%;
• $104.12 million of Verizon’s $1,034,090,000 principal amount outstanding of 3% notes due 2021, with pricing set at $1,007.13 based on a fixed spread of 20 bps over the 2.5% U.S. Treasury note due Jan. 31, 2021 for a reference yield of 2.504% and an exchange offer yield of 2.704%;
• $78,306,000 of Verizon’s $699,254,000 principal amount outstanding of 1.75% notes due 2021, with pricing set at $977.40 based on a fixed spread of 20 bps over the 2.5% U.S. Treasury note due Jan. 31, 2021 for a reference yield of 2.504% and an exchange offer yield of 2.704%;
• $21,046,000 of GTE’s $177,767,000 principal amount outstanding 8.75% notes due 2021, with pricing set at $1,142.40 based on a fixed spread of 65 bps over the 2.5% U.S. Treasury note due Jan. 31, 2021 for a reference yield of 2.504% and an exchange offer yield of 3.154%;
• $123,172,000 of Verizon’s $1,315,099,000 principal amount outstanding of floating-rate notes due 2022 for a total exchange price of $1,017.50 per $1,000 of notes;
• $103,372,000 of Verizon’s $980,021,000 principal amount outstanding of its 2.946% notes due 2022, with pricing set at $1,004.84 based on a fixed spread of 32 bps over the 2.5% U.S. Treasury note due Feb. 15, 2022 for a reference yield of 2.459% and an exchange offer yield of 2.779%;
• $90,344,000 of Verizon’s $1,433,303,000 principal amount outstanding of its 3.125% notes due 2022, with pricing set at $1,010.04 based on a fixed spread of 32 bps over the 2.5% U.S. Treasury note due Feb. 15, 2022 for a reference yield of 2.459% and an exchange offer yield of 2.779%;
• $120,671,000 of Verizon’s $1,049,811,000 principal amount outstanding of its 2.45% notes due 2022, with pricing set at $988.22 based on a fixed spread of 33 bps over the 2.5% U.S. Treasury note due Feb. 15, 2022 for a reference yield of 2.459% and an exchange offer yield of 2.789%;
• $324,616,000 of Verizon’s $4,121,470,000 principal amount outstanding of its 5.15% notes due 2023, with pricing set at $1,096.35 based on a fixed spread of 41 bps over the 2.5% U.S. Treasury note due Jan. 31, 2024 for a reference yield of 2.464% and an exchange offer yield of 2.874%;
• $178,371,000 of Verizon’s $847,641,000 principal amount outstanding of its 4.15% notes due 2024, with pricing set at $1,051.32 based on a fixed spread of 53 bps over the 2.5% U.S. Treasury note due Jan. 31, 2024 for a reference yield of 2.464% and an exchange offer yield of 2.994%;
• $758,391,000 of Verizon’s $2.5 billion principal amount outstanding of its 3.5% notes due 2024, with pricing set at $1,020.63 based on a fixed spread of 62 bps over the 2.5% U.S. Treasury note due Jan. 31, 2024 for a reference yield of 2.464% and an exchange offer yield of 3.084%; and
• $1,758,651,000 of Verizon’s $4,016,261,000 principal amount outstanding of its 3.376% notes due 2025, with pricing set at $1,010.35 based on a fixed spread of 72 bps over the 2.5% U.S. Treasury note due Jan. 31, 2024 for a reference yield of 2.464% and an exchange offer yield of 3.184%.
Verizon accepted for exchange $1,525,054,000 of its 3.376% notes, using a proration factor of 86.74%.
Holders had tendered the following amount of notes for exchange as of the early deadline, but none of those notes will be accepted:
• $327,699,000 of Verizon’s $1,788,800,000 principal amount outstanding of its floating-rate notes due 2025;
• $151,000 of Verizon’s $562,561,000 principal amount outstanding of its 7.75% notes due 2030;
• $10,425,000 of GTE’s $266,066,000 principal amount outstanding 6.94% notes due 2028;
• $13,203,000 of Verizon’s $441,613,000 principal amount outstanding of Verizon’s 6.4% notes due 2033; and
• $68,000 of Verizon’s $501,152,000 principal amount outstanding of its 5.85% notes due 2035.
There is an early participation payment of $50 cash for noteholders who tendered their notes by 5 p.m. ET on Feb. 25.
Holders who tendered after the early date would have received the exchange price, which is the total exchange price less the early participation payment.
The early settlement date will be Feb. 28, previously moved back one calendar day. And the final settlement date was extended one day to March 13. Pricing was extended from Feb. 25.
Verizon previously announced an amendment that the company will not be obligated to accept for exchange any tendered old notes of any series or issue any new notes, pay cash or complete the exchange offer if the company deems it reasonable that such an exchange would qualify as a “significant modification” of the old notes for U.S. federal income tax purposes, as determined on the relevant early participation date or expiration date.
Based on current information, there is a high likelihood that Verizon’s 6.4% notes due 2033 and a possibility that Verizon’s 7.75% notes due 2030 would not satisfy the exchange tax condition, the company said.
Global Bondholder Services Corp. will act as the information agent and exchange agent (866 470-3800 or 212 430-3774).
Call issued
Verizon plans to redeem the following amount of notes on March 29 at a make-whole premium:
• All of its $699,254,000 principal amount of outstanding 1.75% notes due 2021 at a make-whole premium of 15 bps;
• All of its $1,034,090,000 principal amount of outstanding 3% notes due 2021 at a make-whole premium of 20 bps; and
• $315.4 million of its $1,272,299,000 principal amount of outstanding 3.5% notes due 2021 at a make-whole premium of 25 bps.
Verizon is a New York-based telecommunications company.
New notes
| Issuer: | Verizon Communications Inc.
|
| Issue: | Notes
|
| Amount: | $4 billion
|
| Maturity: | 2029
|
| Coupon: | 4.016%
|
| Spread: | 137 bps
|
| Reference security: | 2.625% U.S. Treasury due Feb. 15, 2029
|
| Settlement date: | Feb. 28
|
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