Verizon to issue £694.8 million total new notes under exchange offer

By Marisa Wong

Madison, Wis., June 26 – Verizon Communications Inc. announced the final results of the private offer to exchange Cellco Partnership and Verizon Wireless Capital LLC’s £600 million of outstanding 8.875% notes due Dec. 18, 2018.

Holders had tendered a total of £554.19 million of the notes by 11:59 p.m. ET on June 25, the expiration of the offer. Of the total amount, £13,639,000 was tendered after the early participation date, 11:59 p.m. ET on June 11. All of the tendered notes have been accepted for exchange, according to a press release.

Holders had tendered £540,551,000 of the notes by the early participation date, and early settlement occurred on June 18, according to a previous announcement. Final settlement is slated for June 27.

In exchange for the tendered 8.875% notes, the company will issue £694,804,000 aggregate principal amount of new notes and make cash payments totaling £22,295,396.10.

The company had already issued £678,369,000 principal amount of new notes and made a cash payment of £21,747,249.69 for the early tendered notes. Verizon expects to issue £16,435,000 of new notes and pay £548,146.41 in cash for notes tendered after the early deadline.

As previously announced, the company is offering Verizon’s new 4.073% sterling-denominated notes due 2024 plus a cash amount in exchange for tendered notes.

Pricing for the exchange offer was set on June 11 using the yield of the 5% U.K. Treasury note due March 7, 2018 plus a spread of 40 basis points. The exchange reference security yield was 1.546%, and the exchange offer yield was 1.955%. The cash amount was set at £40.00, and the new notes amount will be £1,255.19.

The coupon on the new notes was set using the sum of the new notes spread of 130 basis points and the yield of the 2.25% U.K. Treasury bond due Sept. 7, 2023 at 7 a.m. ET on June 11.

The yield was 2.732%. The spread was set on June 2.

The total purchase price is £1,295.19 for each £1,000 principal amount of 8.875% notes tendered by the early tender date.

The total amount includes an early exchange premium of £50.00 principal amount of new notes for each £1,000 principal amount of existing notes tendered by the early tender deadline.

Those who tendered after the early deadline will receive the exchange price, which is the total exchange price less the early exchange premium.

Verizon will also pay accrued interest.

The Rule 144A and Regulation S exchange offer began on May 29.

The exchange offer was conditioned on holders tendering at least £300 million principal amount of the 8.875% notes, which had been satisfied.

Credit Suisse Securities (Europe) Ltd. (44 20 7883 8763 or liability.management@credit-suisse.com) is the lead dealer manager for the offer, and Banca IMI Securities, BNP Paribas, Loop Capital Markets and Lebenthal Capital Markets are the co-dealer managers. Lucid Issuer Services Ltd. (44 20 7704 0880, attn.: Sunjeeve Patel/Paul Kamminga, verizon@lucid-is.com) is the exchange agent and information agent.

Verizon is a New York City-based telecommunications company.

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