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Verizon begins offer to exchange 8.875% notes for new sterling notes
By Marisa Wong
Madison, Wis., May 29 - Verizon Communications Inc. said it began a private offer to exchange Cellco Partnership and Verizon Wireless Capital LLC's £600 million of outstanding 8.875% notes due Dec. 18, 2018 for Verizon's new sterling-denominated notes due 2024 and an amount in cash.
The exchange offer is conditioned on holders tendering at least £300 million principal amount of the 8.875% notes.
The Rule 144A and Regulation S exchange offer will expire at 11:59 p.m. ET on June 25.
Tenders may be withdrawn at any time at or prior to 11:59 p.m. ET on June 11.
The price for each £1,000 principal amount of existing 8.875% notes tendered will be calculated at 7 a.m. ET on June 11. Pricing will be based on the yield of the 5% U.K. Treasury note due March 7, 2018 plus a spread of 40 basis points.
The cash amount is tentatively set at £80.00.
Holders who tender their 8.875% notes at or prior to 11:59 p.m. ET on June 11, the early participation date, will receive the total exchange price, which includes an early exchange premium of £50.00 principal amount of new notes for each £1,000 principal amount of existing notes tendered.
Holders tendering after the early participation date but at or prior to the expiration date will receive the exchange price, which is the total exchange price less the early exchange premium.
Verizon will also pay accrued interest.
Pricing of the new notes will be based on the yield of the 2.25% U.K. Treasury bond due Sept. 7, 2023 plus a spread of at least 130 bps, to be calculated on June 2.
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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