Reports: Verizon Plans Record Bond Sale Of Up To $49 Bln

(RTTNews) - U.S. telecommunications giant Verizon Communications Inc. (VZ) plans to sell bonds worth up to $49 billion to raise funds for the planned $130 billion buyout of its wireless operations, according to media reports on Tuesday.

The bond sale by Verizon, said to be in an eight-part offering on Wednesday, will be the largest ever corporate bond sale, dwarfing the $17 billion bond sale by Apple Inc. (AAPL) earlier this year.

In early September, Verizon agreed to buy British mobile phone company Vodafone Group Plc's (VOD, VOD.L) 45 percent stake in their Verizon Wireless joint venture, in a $130 billion cash-and-stock deal that gives it full control of the largest and most profitable U.S. mobile phone carrier.

According to media reports, Verizon now plans to sell fixed-rate debt with maturities ranging from three to 30 years as well as two portions of floating-rate securities. The securities will be offered at rates of between 2.25 and 2.65 percentage points above the comparable Treasury-bond yields. The company might also sell debt denominated in euros, British pounds and possibly, yen.

Verizon has reportedly received more than $90 billion worth of investor orders for the debt on Tuesday. The strong demand for the deal highlights investor interest in buying bonds issued by large companies amid an improving economy and rising interest rates.

According to media reports, Verizon may sell about $13 billion to $15 billion of fixed-and floating-rate bonds maturing in three and five years.

Bloomberg reported that the 3-year, fixed-rate notes may yield about 165 basis points more than similar-maturity Treasuries, while the 5-year debt may pay a spread of about 190 basis points.

The company may also reportedly sell about $15 billion of 7-year and 10-year bonds, paying spreads of about 215 basis points and 225 basis points. It may also sell about $18 billion to $20 billion of 20-year and 30-year bonds yielding about 250 and 265 basis points more than benchmarks.

The planned bond sale on Wednesday will reportedly enable Verizon to partly refinance a $61 billion one-year bridge loan taken out by the company to pay for the debt-funding part of the acquisition. The remaining part of the bridge loan will be reportedly replaced with about $12 billion of loans.

The Verizon bond sale is being managed by Barclays Plc (BCS, BARC.L), Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and Morgan Stanley (MS).

Apple's $17 billion bond sale in April 2013 is said to be the biggest corporate bond offering currently on record and its first since 1996. That offering topped the $16.5 billion six-part offering made by Roche Holding AG (RHHBY.PK) in February 2009.

VZ closed Tuesday's trading at $46.47, up $0.56 or 1.22 percent on a volume of 19.01 million shares.