By Andrea Heisinger
New York, March 23 - Verizon Communications, Inc. priced a larger-than-expected $6.25 billion of senior notes (A3/A-/A) in five parts on Wednesday, an informed source said.
The deal size didn't come out until mid-afternoon, and earlier in the day the amount had been speculated anywhere between $4.5 billion and $6 billion.
The $1 billion of three-year floating-rate notes sold at par to yield three-month Libor plus 61 basis points. Price talk was in the range of Libor plus 61 bps to 66 bps.
In a second tranche, the issuer sold $1.5 billion 1.95% three-year notes at 99.867 to yield 1.996%, or 85 bps over Treasuries. The spread came at the tight end of guidance, which was in the 85 bps to 90 bps range.
In a third tranche, Verizon sold $1.25 billion 2% five-year notes at 99.48 to yield 2.113% with a spread of Treasuries plus 105 bps. The tranche priced in line with guidance in the 105 bps area.
In a fourth tranche, the issuer priced $1.5 billion 4.6% 10-year notes at 99.145 to yield 4.708% with a spread of Treasuries plus 135 bps. The notes were sold in line with talk in the 135 bps area.
The final tranche was $1 billion of 6% 30-year bonds sold at 98.333 to yield 6.122%, or 165 bps over Treasuries. These bonds also priced at the tight end of talk in the 165 bps to 170 bps range.
The bookrunner for the three-year floaters was Goldman Sachs & Co., which was joined on the books for the three-year fixed-rate notes by Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co., Inc. and Wells Fargo Securities LLC.
Citigroup, JPMorgan, Morgan Stanley and Wells Fargo ran the books for the five-, 10- and 30-year paper.
Co-managers were Barclays Capital Inc., Merrill Lynch and RBS Securities Inc.
Proceeds are going to repay commercial paper and for general corporate purposes.
Verizon last priced bonds in a $2.75 billion sale of 10- and 30-year senior notes on March 24, 2009. Those 6.35% 10-year notes priced at a steep spread of 387.5 bps and the 7.35% 30-year bonds at the same level.
The broadband and telecommunications company is based in New York City.
| Issuer: | Verizon Communications, Inc.
|
| Issue: | Senior notes
|
| Amount: | $6.25 billion, increased from $6 billion
|
| Co-managers: | Barclays Capital Inc., Merrill Lynch, RBS Securities Inc.
|
| Trade date: | March 23
|
| Settlement date: | March 28
|
| Ratings: | Moody's: A3
|
| Standard & Poor's: A-
|
| Fitch: A
|
|
|
| Three-year floaters
|
| Amount: | $1 billion
|
| Maturity: | March 28, 2014
|
| Bookrunner: | Goldman Sachs & Co.
|
| Coupon: | Three-month Libor plus 61 bps
|
| Price: | Par
|
| Yield: | Three-month Libor plus 61 bps
|
| Call: | Non-callable
|
| Price talk: | Libor plus 61 bps to 66 bps
|
|
|
| Three-year fixed-rate notes
|
| Amount: | $1.5 billion
|
| Maturity: | March 28, 2014
|
| Bookrunners: | Citigroup Global Markets Inc., Goldman Sachs, J.P. Morgan Securities LLC, Morgan Stanley & Co., Inc., Wells Fargo Securities LLC
|
| Coupon: | 1.95%
|
| Price: | 99.867
|
| Yield: | 1.996%
|
| Spread: | Treasuries plus 85 bps
|
| Price talk: | 85 bps to 90 bps
|
|
|
| Five-year notes
|
| Amount: | $1.25 billion
|
| Maturity: | April 1, 2016
|
| Bookrunners: | Citigroup, JPMorgan, Morgan Stanley, Wells Fargo
|
| Coupon: | 2%
|
| Price: | 99.48
|
| Yield: | 2.113%
|
| Spread: | Treasuries plus 105 bps
|
| Call: | Make-whole at Treasuries plus 105 bps
|
| Price talk: | 105 bps area
|
|
|
| 10-year notes
|
| Amount: | $1.5 billion
|
| Maturity: | April 1, 2021
|
| Bookrunners: | Citigroup, JPMorgan, Morgan Stanley, Wells Fargo
|
| Coupon: | 4.6%
|
| Price: | 99.145
|
| Yield: | 4.708%
|
| Spread: | Treasuries plus 135 bps
|
| Call: | Make-whole at Treasuries plus 135 bps
|
| Price talk: | 135 bps area
|
|
|
| 30-year bonds
|
| Amount: | $1 billion
|
| Maturity: | April 1, 2041
|
| Bookrunners: | Citigroup, JPMorgan, Morgan Stanley, Wells Fargo
|
| Coupon: | 6%
|
| Price: | 98.333
|
| Yield: | 6.122%
|
| Spread: | Treasuries plus 165 bps
|
| Call: | Make-whole at Treasuries plus 165 bps
|
| Price talk: | 165 bps to 170 bps
|
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