Verizon Offers $49 Bln Notes Towards Buyout Of Vodafone's JV Stake

(RTTNews) - Confirming media speculation, Verizon Communications Inc. (VZ) announced offering of $49 billion worth of bonds in eight parts, as the telecom giant prepares to buy out 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.

The offering is said to be the largest ever corporate bond sale, dwarfing the $17 billion bond sale by Apple Inc. (AAPL) in April which topped the $16.5 billion six-part offering made by Roche Holding AG (RHHBY.PK) in February 2009.

Verizon offered $2.25 billion floating rate notes due 2016, bearing interest at a rate equal to three-month LIBOR plus 1.53 percent. The firm also offered $1.75 billion of notes due 2018 with interest at a rate equal to three-month LIBOR plus 1.75 percent.

According to Verizon, $4.25 billion of notes are due 2016 with interest rates of 2.50 percent per year and $4.75 billion of notes are due 2018 at the rate of 3.65 percent annually.

The biggest portion of the 8-part deal is the 30 year debentures, due in 2043. These bear interest at the rate of 6.55 percent per year.

The company also offered $4 billion notes due 2020, $11 billion notes due 2023 and $6 billion notes due 2033 with annual interest rates of 4.50 percent, 5.15 percent and 6.40 percent, respectively.

Barclays Capital Inc., J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Inc. and Morgan Stanley & Co. LLC are acting as representatives of the several underwriters for the notes.

According to Verizon, proceeds from the bond sale will be issued to finance the acquisition of Vodafone's stake in Verizon Wireless.

Verizon is to pay Vodafone $58.9 billion in cash, financed with credit from J.P. Morgan Chase Bank, N.A., Morgan Stanley Senior Funding, Inc., Bank of America, N.A. and Barclays. The company also will issue $60.2 billion in stock to Vodafone shareholders.

VZ closed at $46.52 on Wednesday.