Verizon posts early tenders, ups cap for to $1.9 billion for group 1

By Susanna Moon

Chicago, March 19 – Verizon Communications Inc. said it lifted the waterfall cap in the first set of tender offers so that it can accept for purchase all of the 2.946% notes due 2022 tendered by the early deadline of 5 p.m. ET on March 16.

As announced March 5, Verizon is holding separate cash tender offers to repurchase up to a total of $3 billion of its notes from 13 series.

The series are divided into two sets, with nine series comprising the group 1 notes and four series comprising the group 2 notes with a cap using a waterfall method to accept notes on a priority basis.

Originally, Verizon planned to repurchase up to $1.5 billion of notes from each group.

In the group 1 offers Verizon will now pay total cash of about $1.9 billion, according to a press release.

Group 1 notes

The early tender count is as follows for the group 1 notes, listed in order of acceptance priority:

• $1,909,019,000, or 59.76%, of the $3,194,253,000 2.946% notes due 2022, with pricing to be set using the 2.625% Treasury note due Feb. 28, 2023 plus 55 basis points;

• $426.61 million, or 31.96%, of the $1,344,842,000 4.6% notes due 2021, with pricing to be set using the 2.25% Treasury note due Feb. 15, 2021 plus 50 bps;

• $353,562,000, or 21.71%, of the $1,628,716,000 3.5% notes due 2021, with pricing to be set using the 2.25% Treasury note due Feb. 15, 2021 plus 65 bps;

• $322,843,000, or 37.47%, of the $861,617,000 3.45% notes due 2021, with pricing to be set using the 2.25% Treasury note due Feb. 15, 2021 plus 50 bps;

• $859,874,000, or 46.48%, of the $1.85 billion 3.125% notes due 2022, with pricing to be set using the 2.625% Treasury note due Feb. 28, 2023 plus 55 bps;

• $295,985,000, or 24.12%, of the $1,226,930,000 3% notes due 2021, with pricing to be set using the 2.25% Treasury note due Feb. 15, 2021 plus 65 bps;

• $195,964,000, or 13.38%, of the $1,464,954,000 2.45% notes due 2022, with pricing to be set using the 2.625% Treasury note due Feb. 28, 2023 plus 70 bps;

• $158,309,000, or 18.12%, of the $873,757,000 1.75% notes due 2021, with pricing to be set using the 2.25% Treasury note due Feb. 15, 2021 plus 65 bps; and

• $408,192,000, or 29.16%, of the $1.4 billion floating-rate notes due 2022 for a total purchase price of $1,021 per $1,000 principal amount.

Group 2 notes

For the group 2 notes, the early tenders are as follows, with the notes listed in order of acceptance:

• $424,359,000, or 7.72%, of the $5,499,999,000 4.672% notes due 2055, with pricing to be set using the 2.75% Treasury note due Nov. 15, 2047 plus 195 bps;

• $246.18 million, or 4.92%, of the $5 billion 4.522% notes due 2048, with pricing to be set using the 2.75% Treasury note due Nov. 15, 2047 plus 180 bps;

• $163,916,000, or 2.98%, of the $5.5 billion 5.012% notes due 2054, with pricing to be set using the 2.75% Treasury note due Nov. 15, 2047 plus 195 bps; and

• $130,868,000, or 3.21%, of the $4,072,197,000 5.012% notes due 2049, with pricing to be set using the 2.75% Treasury note due Nov. 15, 2047 plus 185 bps.

For each series, the total amount will include an early tender premium of $50 per $1,000 of notes tendered by the early deadline, 5 p.m. ET on March 16.

The offers will continue until 11:59 p.m. ET on March 30. Tenders may not be withdrawn after the early deadline.

Because the tender cap has been reached for the group 1 offers, there will be no final settlement date and no additional tenders will be accepted for purchase after the early deadline, according to the company update on Monday.

The cap for the group 2 offers has not been met so far, and holders may continue to tender those notes.

Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106), Goldman Sachs & Co. LLC (800 828-3182 or 212 577-1452) and J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811) are the lead dealer managers for the offers.

Global Bondholders Services Corp. (866 470-3800 or 212 430-3774) is the information agent for the offers.

Verizon is a New York City-based telecommunications company.

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