Verizon prices, gives results of upsized waterfall tender for 30 series

By William Gullotti

Buffalo, N.Y., March 7 – Verizon Communications Inc. announced the accepted amounts and pricing for its upsized $5.6 billion waterfall tender offer for 30 series of debt securities, according to a press release on Monday.

In an earlier announcement on Monday, Verizon said it raised the offer cap to about $5.6 billion from $4 billion. The new offer cap is the total amount of cash needed to purchase all roughly $5.5 billion notes tendered by the early deadline at 5 p.m. ET on March 4.

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 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. With respect to Verizon’s offer to buy up to $1 billion from its $4,499,992,000 outstanding 2.987% notes due 2056 (Cusips: 92343VFW9, 92343VFM1, U9221ABR8), the total consideration was set at $844.10 per $1,000 principal amount of notes. Pricing was calculated using 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 accepted amounts, listed by their acceptance priority order, with updated pricing information that is 10 bps higher than the original offer in all cases and with the total consideration per $1,000 principal amount, are as follows:

• $273,211,000, or 19.39%, tendered of the $1,409,338,000 outstanding 4.812% notes due 2039 (Cusip: 92343VDR2) for a total consideration of $1,155.01, calculated using an offer yield of 3.587%. Pricing was 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) for a total consideration of $1,185.89, based on an offer yield of 3.7%. Pricing was calculated using the 1.875% U.S. Treasury due Nov. 15, 2051 plus 148 bps;

• $26,314,000, or 3.64%, tendered of the $722,998,000 outstanding 5.012% notes due 2049 (Cusip: 92343VDS0) for a total consideration of $1,221.31, based on an offer yield of 3.71%. Pricing was calculated using 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) for a total consideration of $1,138.12, based on an offer yield of 3.7%. Pricing was calculated using 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) for a total consideration of $1,110.03, based on an offer yield of 3.277%. Pricing was calculated using 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) for a total consideration of $1,379.82, based on an offer yield of 3.347%. Pricing was calculated using 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) for a total consideration of $1,341.65, based on an offer yield of 3.347%. Pricing was calculated using 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) for a total consideration of $1,392.03, based on an offer yield of 3.347%. Pricing was calculated using 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) for a total consideration of $1,630.13, based on an offer yield of 3.857%. Pricing was calculated using 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) for a total consideration of $1,392.03, based on an offer yield of 3.347%. Pricing was calculated using 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) for a total consideration of $1,433.65, based on an offer yield of 3.857%. Pricing was calculated using 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) for a total consideration of $1,362.39, based on an offer yield of 3.857%. Pricing was calculated using 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) for a total consideration of $1,295.34, based on an offer yield of 3.297%, calculated using 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) for a total consideration of $1,307.61, based on an offer yield of 3.807%, calculated using 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) for a total consideration of $1,320.18, based on an offer yield of 3.497%, calculated using 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) for a total consideration of $1,264.10, based on an offer yield of 3.397%, calculated using 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) for a total consideration of $1,165.69, based on an offer yield of 3.347%, calculated using 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) for a total consideration of $1,287.34, based on an offer yield of 3.857%, calculated using 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) for a total consideration of $1,175.87, based on an offer yield of 3.74%, calculated using 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) for a total consideration of $1,237.90, based on an offer yield of 3.74%, calculated using 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) for a total consideration of $1,400.44, based on an offer yield of 3.807%, calculated using 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) for a total consideration of $1,219.22, based on an offer yield of 3.377%, calculated using 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) for a total consideration of $1,282.45, based on an offer yield of 3.75%. Pricing was calculated using 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) for a total consideration of $1,125.86, calculated using an offer yield of 3.177%. Pricing was 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) for a total consideration of $1,111.73, based on an offer yield of 3.277%. Pricing was calculated using the 1.875% U.S. Treasury due Feb. 15, 2032 plus 148 bps and 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) for a total consideration of $1,159.26, based on an offer yield of 3.397%. Pricing was calculated using the 1.875% U.S. Treasury due Feb. 15, 2032 plus 160 bps and 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) for a total consideration of $1,135.54, based on an offer yield of 3.767%. Pricing was calculated using 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) for a total consideration of $1,064.61, calculated using an offer yield of 3.72%. Pricing was 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) for a total consideration of $1,017.28, calculated using an offer yield of 3.727%. Pricing was based on the 2% U.S. Treasury due Nov. 15, 2041 plus 142 bps and was calculated using the first par call date.

In each series, the total consideration includes a $50 early tender premium per $1,000 note. Pricing was determined at 9 a.m. ET on March 7.

Investors will also receive unpaid interest to the settlement date.

As previously reported, 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, previously 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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