Verizon tenders for 31 note issues, offers to swap out 18 more series

By Susanna Moon

Chicago, Nov. 16 – Verizon Communications Inc. said it began 31 separate tenders to spend up to $1 billion by way of a “waterfall” method to purchase outstanding series of notes.

Verizon also is holding separate offers and consent solicitations to exchange 18 series of the notes issued by its wholly owned subsidiaries for new notes issued by Verizon, according to a company announcement.

The tender offers and consent solicitations will remain open until 11:59 p.m. ET on Dec. 13.

The GTE LLC 6.84% debentures due 2018 are excluded in the separate exchange offers and consent solicitations, the release noted.

The total payment will include an early premium of $50.00 for each $1,000 principal amount of notes tendered before 5 p.m. ET on Nov. 29, the early tender date.

Holders also will receive accrued interest to but excluding the settlement date.

There is no separate consent payment for the consent solicitations, the company explained.

Tendered notes may be withdrawn and consents revoked before the early deadline.

In the waterfall offers, Verizon is offering to accept for purchase with the offers capped at $1 billion.

Pricing will be set using a reference security plus a fixed spread for a total hypothetical purchase price of $1,000 principal amount as follows, with the notes listed in order of priority acceptance levels:

• GTE LLC’s $315,309,000 6.94% debentures due 2028 based on the 2.25% Treasury note due Nov. 15, 2027 plus 150 basis points for a hypothetical total purchase price of $1,258.20;

• GTE LLC’s $192,879,000 8.75% debentures due 2021 based on the 2% Treasury note due Oct. 31, 2022 plus 60 bps for a hypothetical total purchase price of $1,222.64;

• Verizon New York Inc.’s $201,579,000 7.375% debentures due 2032 based on the 2.25% Treasury note due Nov. 15, 2027 plus 180 bps for a hypothetical total purchase price of $1,340.87;

• Alltel Corp.’s $173,779,000 7.875% senior notes due 2032 based on the 2.25% Treasury note due Nov. 15, 2027 plus 165 bps for a hypothetical total purchase price of $1,419.76;

• Verizon New England Inc.’s $145,697,000 7.875% debentures due 2029 based on the 2.25% Treasury note due Nov. 15, 2027 plus 160 bps for a hypothetical total purchase price of $1,366.48;

• Alltel’s $138,677,000 6.8% debentures due 2029 based on the 2.25% Treasury note due Nov. 15, 2027 plus 145 bps for a hypothetical total purchase price of $1,271.57;

• Verizon New Jersey Inc.’s $111,392,000 8% debentures due 2022 based on the 2% Treasury note due Oct. 31, 2022 plus 65 bps for a hypothetical total purchase price of $1,220.53;

• Verizon New Jersey Inc.’s $51,335,000 7.85% debentures due 2029 based on the 2.25% Treasury note due Nov. 15, 2027 plus 160 bps for a hypothetical total purchase price of $1,364.12;

• Verizon New York Inc.’s $69,404,000 6.5% debentures due 2028 based on the 2.25% Treasury note due Nov. 15, 2027 plus 150 bps for a hypothetical total purchase price of $1,221.04;

• Verizon Maryland LLC’s $152,911,000 5.125% debentures due 2033 based on the 2.75% Treasury note due Aug. 15, 2047 plus 145 bps for a hypothetical total purchase price of $1,093.47;

• Verizon Communications Inc.’s $1,145,489,000 6.55% notes due 2043 based on the 2.75% Treasury note due Aug. 15, 2047 plus 175 bps for a hypothetical total purchase price of $1,293.66;

• Verizon Communications Inc.’s $563.18 million 7.75% notes due 2030 based on the 2.25% Treasury note due Nov. 15, 2027 plus 165 bps for a hypothetical total purchase price of $1,372.44;

• Verizon Communications Inc.’s $363,554,000 6.4% notes due 2038 based on the 2.75% Treasury note due Aug. 15, 2047 plus 175 bps for a hypothetical total purchase price of $1,235.89;

• Verizon Communications Inc.’s $444.5 million 6.4% notes due 2033 based on the 2.75% Treasury note due Aug. 15, 2047 plus 135 bps for a hypothetical total purchase price of $1,252.47;

• Verizon Communications Inc.’s $206,855,000 6.9% notes due 2038 based on the 2.75% Treasury note due Aug. 15, 2047 plus 175 bps for a hypothetical total purchase price of $1,302.70;

• Verizon Communications Inc.’s $108,862,000 8.95% notes due 2039 based on the 2.75% Treasury note due Aug. 15, 2047 plus 185 bps for a hypothetical total purchase price of $1,567.86;

• Verizon Communications Inc.’s $502,452,000 5.85% notes due 2035 based on the 2.75% Treasury note due Aug. 15, 2047 plus 155 bps for a hypothetical total purchase price of $1,178.22;

• Verizon Communications Inc.’s $253,267,000 6% notes due 2041 based on the 2.75% Treasury note due Aug. 15, 2047 plus 185 bps for a hypothetical total purchase price of $1,183.89;

• Verizon Communications Inc.’s $153,447,000 7.35% notes due 2039 based on the 2.75% Treasury note due Aug. 15, 2047 plus 185 bps for a hypothetical total purchase price of $1,355.22;

• Verizon Communications Inc.’s $159,514,000 7.75% notes due 2032 based on the 2.25% Treasury note due Nov. 15, 2027 plus 185 bps for a hypothetical total purchase price of $1,378.36;

• Verizon Communications Inc.’s $305,309,000 6.25% notes due 2037 based on the 2.75% Treasury note due Aug. 15, 2047 plus 170 bps for a hypothetical total purchase price of $1,217.73;

• Verizon Communications Inc.’s $262,895,000 5.05% notes due 2034 based on the 2.75% Treasury note due Aug. 15, 2047 plus 145 bps for a hypothetical total purchase price of $1,086.93;

• GTE LLC’s $273,441,000 6.84% debentures due 2018 based on the 1.5% Treasury note due Oct. 31, 2019 plus 10 bps for a hypothetical total purchase price of $1,016.66;

• Verizon Virginia LLC’s $56,009,000 7.875% debentures due 2022 based on the 2% Treasury note due Oct. 31, 2022 plus 70 bps for a hypothetical total purchase price of $1,195.91;

• Verizon Pennsylvania LLC’s $36,009,000 8.75% debentures due 2031 based on the 2.25% Treasury note due Nov. 15, 2027 plus 175 bps for a hypothetical total purchase price of $1,478.46;

• Verizon Pennsylvania LLC’s $31,343,000 8.35% debentures due 2030 based on the 2.25% Treasury note due Nov. 15, 2027 plus 170 bps for a hypothetical total purchase price of $1,427.25;

• Verizon Maryland LLC’s $27,358,000 8% debentures due 2029 based on the 2.25% Treasury note due Nov. 15, 2027 plus 160 bps for a hypothetical total purchase price of $1,376.14;

• Verizon Maryland LLC’s $21,314,000 8.3% debentures due 2031 based on the 2.25% Treasury note due Nov. 15, 2027 plus 175 bps for a hypothetical total purchase price of $1,430.92;

• Verizon Pennsylvania LLC’s $55,875,000 6% debentures due 2028 based on the 2.25% Treasury note due Nov. 15, 2027 plus 155 bps for a hypothetical total purchase price of $1,182.70;

• Verizon Virginia LLC’s $9,031,000 8.375% debentures due 2029 based on the 2.25% Treasury note due Nov. 15, 027 plus 160 bps for a hypothetical total purchase price of $1,410.17; and

• Verizon Delaware LLC’s $2,381,000 8.625% debentures due 2031 based on the 2.25% Treasury note due Nov. 15, 2027 plus 175 bps for a hypothetical total purchase price of $1,469.73.

Pricing will be set after 11 a.m. ET on Nov. 30.

The hypothetical total purchase price includes an early premium of $50.00 per $1,000 principal amount, with pricing set using a reference yield at 11 a.m. ET on Nov. 14 and assuming a hypothetical settlement date of Dec. 15.

Goldman Sachs & Co. LLC (800 828-3182 or 212 357-1452) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811) are the lead dealer managers and lead solicitation agents. Loop Capital Markets LLC and Samuel A. Ramirez & Co., Inc. are the co-dealer managers and co-solicitation agents. Global Bondholder Services Corp. (866 470-3800 or 212 430-3774) is the tender agent and the information agent.

Exchange offers

In the exchange, Verizon Communications Inc. is offering to issue new 8% notes due June 1, 2022, new 6.8% notes due May 1, 2029 and new 7.875% notes due July 1, 2032, according to a separate company announcement.

The exchange offers and consent solicitations will end at 11:59 p.m. ET on Dec. 13.

The total exchange value includes an early premium of $50.00 principal amount of new notes for each $1,000 principal amount of notes tendered before 5 p.m. ET on Nov. 29.

Holders also will receive accrued interest to but excluding the settlement date.

Tendered notes may be withdrawn before the early deadline.

The offers contain a minimum issue condition that requires that at least $75 million principal amount of new notes due 2022 be issued or at least $100 million of the new notes due 2029 and new notes due 2032.

The company is offering to swap out the following notes per $1,000 principal amount for 8% notes due 2022 issued by Verizon Communications Inc.:

• Verizon New Jersey Inc.’s $111,392,000 8% debentures due 2022 for $1,000 principal amount of new notes;

• GTE LLC’s $192,879,000 8.75% debentures due 2021 for $1,002 new notes;

• Verizon Virginia LLC’s $56,009,000 7.875% debentures due 2022 for $980 new notes;

Holders may exchange the following notes for 6.8% notes due 2029:

• Alltel Corp.’s $138,677,000 6.8% debentures due 2029 for $1,000 new notes;

• GTE LLC’s $315,309,000 6.94% debentures due 2028 for $826 new notes and $208 cash;

• Verizon New York Inc.’s $69,404,000 6.5% debentures due 2028 for $960 new notes;

• Verizon Pennsylvania LLC’s $55,875,000 6% debentures due 2028 for $777 new notes and $195 cash;

• Verizon Virginia LLC’s $9,031,000 8.375% debentures due 2029 for $984 new notes and $159 cash;

• Verizon Maryland LLC’s $27,358,000 8% debentures due 2029 for $962 new notes and $153 cash;

• Verizon Pennsylvania LLC’s $31,343,000 8.35% debentures due 2030 for $1,029 new notes and $119 cash;

• Verizon Maryland LLC’s $21,314,000 8.3% debentures due 2031 for $1,047 new notes and $99 cash;

• Verizon Pennsylvania LLC’s $36,009,000 8.75% debentures due 2031 for $1,085 new notes and $99 cash; and

• Verizon Delaware LLC’s $2,381,000 8.625% debentures due 2031 for $1,086 new notes and $89 cash.

The notes covered by the exchange for new 7.875% notes due 2032 are as follows:

• Alltel Corp.’s $173,779,000 7.875% senior notes due 2032 for $1,000 new notes;

• Verizon New Jersey Inc.’s $51,335,000 7.85% debentures due 2029 for $962 new notes;

• Verizon New England Inc.’s $145,697,000 7.875% debentures due 2029 for $964 new notes;

• Verizon New York Inc.’s $201,579,000 7.375% debentures due 2032 for $946 new notes; and

• Verizon Maryland LLC’s $152,911,000 5.125% debentures due 2033 for $568 new notes and $289 cash.

The exchange value is per $1,000 principal amount.

Global Bondholder Services Corp. (866 470-3800 or 212 430-3774) is the exchange agent and information agent.

Verizon is a New York City-based telecommunications company.

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