Verizon ups waterfall cap to $5.6 billion to accept all early tenders

By Marisa Wong

Los Angeles, March 7 – Verizon Communications Inc. said it has decided to accept for purchase all notes tendered by the early participation date of its previously announced tender offers for 30 series of debt securities.

As a result, the waterfall cap will be increased from $4 billion to the total cash amount sufficient to purchase all notes tendered by the early deadline at 5 p.m. ET on March 4. The new cap is about $5.6 billion, according to a Monday press release.

Verizon had launched the 30 separate tender offers on Feb. 16 and then amended them on Feb. 25. Verizon tweaked the offers to make them more generous by raising the spreads for the pricing considerations by 10 basis points on all 30 of the securities included in the tender offer and also extended the early participation deadline by two days, as previously reported.

As noted before, the overall cap on the tender consideration excludes accrued coupon payments.

The securities were issued either by Verizon or subsidiaries of Verizon.

The first series is the only one with a subcap. Verizon is offering to buy up to $1 billion from its $4,499,992,000 outstanding 2.987% notes due 2056 (Cusips: 92343VFW9, 92343VFM1, U9221ABR8), with pricing to be based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus an increased 158 basis points (with pricing based on the first par call date). As of the early participation date, holders had tendered $848,838,000, or 18.86%, of the 2056 notes.

The rest of the waterfall offer notes and their early tendered amounts, listed by their acceptance priority order and with updated pricing information that is 10 bps higher than the original offer in all cases, are the following:

• $273,211,000, or 19.39%, tendered of the $1,409,338,000 outstanding 4.812% notes due 2039 (Cusip: 92343VDR2) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 128 bps;

• $733,814,000, or 23.72%, tendered of the $3,093,771,000 outstanding 4.862% notes due 2046 (Cusip: 92343VCK8) with pricing to be based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 148 bps;

• $26,314,000, or 3.64%, tendered of the the $722,998,000 outstanding 5.012% notes due 2049 (Cusip: 92343VDS0) with pricing to be based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 149 bps;

• $167,822,000, or 11.86%, tendered of the $1,414,483,000 outstanding 4.522% notes due 2048 (Cusip: 92343VCX0) with pricing to be based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 148 bps;

• $637,792,000, or 25.92%, tendered of the $2,460,199,000 outstanding 4.272% notes due 2036 (Cusip: 92343VCV4) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 148 bps;

• $4,689,000, or 4.21%, tendered of the $111,496,000 outstanding 7.75% notes due 2032 (Cusip: 92344GAS5) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 155 bps;

• $9,286,000, or 8.54%, tendered of the $108,723,000 outstanding 7.375% debentures due 2032 issued by subsidiary Verizon New York Inc. (Cusip: 92344XAB5) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 155 bps;

• $2,651,000, or 4.53%, tendered of the $58,498,000 outstanding 7.875% notes due 2032 issued by subsidiary Alltel Corp. (Cusip: 020039DC4) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 155 bps;

• $1.21 million, or 1.12%, tendered of the $108,368,000 outstanding 8.95% notes due 2039 (Cusip: 92343VAR5) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 155 bps;

• $2 million, or 1.94%, tendered of the $103,014,000 outstanding 7.875% notes due 2032 (Cusip: 92343VEM2) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 155 bps;

• $30,992,000, or 21.64%, tendered of the $143,195,000 outstanding 7.35% notes due 2039 (Cusip: 92343VAU8) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 155 bps;

• $20,485,000, or 11.86%, tendered of the $172.7 million outstanding 6.9% notes due 2038 (Cusip: 92343VAP9) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 155 bps;

• $31,448,000, or 8.16%, tendered of the $385,602,000 outstanding 6.4% notes due 2033 (Cusip: 92343VBS2) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 150 bps;

• $104,578,000, or 37.80%, tendered of the $276,645,000 outstanding 6.4% notes due 2038 (Cusip: 92343VAK0) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 150 bps;

• $33,555,000, or 12.21%, tendered of the $274,853,000 outstanding 6.25% notes due 2037 (Cusip: 92343VAF1) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 170 bps;

• $7,166,000, or 1.68%, tendered of the $427,379,000 outstanding 5.85% notes due 2035 (Cusip: 92344GAX4) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 160 bps;

• $1.78 million, or 1.26%, tendered of the $140,865,000 outstanding 5.125% debentures due 2033 issued by subsidiary Verizon Maryland LLC (Cusip: 92344WAB7) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 155 bps;

• $268,000, or 0.22%, tendered of the $122,405,000 outstanding 6% notes due 2041 (Cusip: 92343VAW4) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 155 bps;

• $113,229,000, or 13.55%, tendered of the $835.79 million outstanding 4.672% notes due 2055 (Cusip: 92343VCZ5) with pricing to be based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 152 bps;

• $31,137,000, or 3.77%, tendered of the $825,118,000 outstanding 5.012% notes due 2054 (Cusip: 92343VCM4) with pricing to be based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 152 bps;

• $1,833,000, or 0.23%, tendered of the $805,189,000 outstanding 6.55% notes due 2043 (Cusip: 92343VBT0) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 150 bps;

• $196,698,000, or 15.23%, tendered of the $1,291,758,000 outstanding 5.25% notes due 2037 (Cusip: 92343VDU5) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 158 bps;

• $75.77 million, or 14.21%, tendered of the $533,109,000 outstanding 5.5% notes due 2047 (Cusip: 92343VDV3) with pricing to be based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 153 bps;

• $863,055,000, or 28.77%, tendered of the $3 billion outstanding 4.5% notes due 2033 (Cusip: 92343VEA8) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 138 bps;

• $386,344,000, or 16.98%, tendered of the $2,274,789,000 outstanding 4.4% notes due 2034 (Cusip: 92343VCQ5) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 148 bps and pricing to take into account the first par call date;

• $23,114,000, or 11.77%, tendered of the $196,306,000 outstanding 5.05% notes due 2034 (Cusip: 92343VBZ6) with pricing to be based on the 1.875% U.S. Treasury due Feb. 15, 2032 plus 160 bps and pricing to take into account the first par call date;

• $82,368,000, or 14.45%, tendered of the $570,169,000 outstanding 4.75% notes due 2042 (Cusip: 92343VBE3) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 146 bps;

• $168,659,000, or 15.40%, tendered of the $1,095,517,000 outstanding 4.125% notes due 2046 (Cusip: 92343VDC5) with pricing to be based on the 1.875% U.S. Treasury due Nov. 15, 2051 plus 150 bps; and

• $151,954,000, or 17.52%, tendered of the $867,453,000 outstanding 3.85% notes due 2042 (Cusip: 92343VBG8) with pricing to be based on the 2% U.S. Treasury due Nov. 15, 2041 plus 142 bps and utilization of the first par call date.

Noteholders who tendered their notes early will receive the full consideration, inclusive of a $50 early tender premium per $1,000 note.

Investors will also receive unpaid interest to the settlement date.

Pricing for the tender offers is scheduled to take place at 9 a.m. ET on March 7, moved from 9 a.m. ET on March 3.

Early settlement is expected for the third business day after the early expiration deadline, now on March 9.

The offers will expire at 5 p.m. ET on March 21, extended from March 17. However, because the waterfall cap has already been exceeded, no additional tenders will be accepted, and there will be no final settlement date.

Barclays (800 438-3242, 212 528-7581), Citigroup Global Markets Inc. (800 558-3745, 212 723-6106), Credit Suisse Securities (USA) LLC (800 820-1633, 212 325-7823), Goldman Sachs & Co. LLC (800 828-3182, 212 357-1452) and Wells Fargo Securities LLC (866 309-6316, 704 410-4756) are the lead dealer managers.

BNP Paribas Securities Corp., Mizuho Securities USA LLC, Cabrera Capital Markets LLC, CastleOak Securities, LP, Great Pacific Securities, R. Seelaus & Co., LLC, Tigress Financial Partners, LLC, Bancroft Capital, LLC, Drexel Hamilton, LLC, MFR Securities, Inc. and Mischler Financial Group, Inc. are the co-dealer managers.

Global Bondholder Services Corp. (855 654-2015, 212 430-3774) is the tender agent and information agent.

Verizon is a New York-based telecommunications company.

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