Verizon Communications sets talk for eight-tranche notes offering

By Aleesia Forni and Paul A. Harris

Virginia Beach, Va., Sept. 10 - Verizon Communications Inc. set talk for its planned eight-tranche offering of senior unsecured notes, according to market sources.

The deal is expected to price early Wednesday.

The deal will consist of three-year fixed- and floating-rate notes and five-year fixed- and floating-rate notes.

There will also be tranches of seven-, 10-, 20- and 30-year bonds.

Talk came in on top of guidance.

Talk on the three-year paper is 165 bps, 190 bps on the five-year, 215 bps on the seven-year, 225 bps on the 10-year, 250 bps on the 20-year and 265 bps on the 30-year.

Talk on the three- and five-year floating tranches will be the Libor equivalent.

One syndicate source said the deal's size could come in at "more than $35 billion" on Tuesday, while another source is expecting the company to sell $46 billion to $49 billion of bonds.

The deal is expected to price early during Wednesday's session and is set to shatter Apple Inc.'s previous bond record.

The computer and mobile communications device company currently holds the record of $17 billion, which priced in six tranches in April.

Books closed at 3 p.m. on Tuesday, and orders reached more than $80 billion, according to a market source.

Proceeds will be used to finance the company's acquisition of Vodafone's 45% ownership in Verizon Wireless.

The notes will feature a make-whole call and a 101% poison put.

J.P. Morgan Securities LLC, Barclays, BofA Merrill Lynch and Morgan Stanley & Co. LLC are the active bookrunners.

Passive bookrunners are Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Mizuho Securities USA Inc., Mitsubishi UFJ Securities, RBC Capital Markets LLC, RBS Securities Inc. and Wells Fargo Securities LLC.

Co-managers are Deutsche Bank Securities Inc. and Santander Investment Securities Inc.

Verizon is a New York City-based telecommunications company.

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