real-time news and commentary for investors
Tuesday, Sep 10
Order activity for Verizon bond offering strong
- Reuters reports orders for a mammoth Verizon (VZ) bond offering meant to help finance the Vodafone deal have topped $30B. Price guidance is expected later today, and is reportedly "likely to be in line with initial guidance."
- Verizon is looking to raise ~$50B overall, and is selling 8 tranches of bonds: 3- and 5-year floating-rate tranches, and 3-, 5-, 7-, 10, 20-, and 30-year fixed-rate tranches.
- Like many other recent investment-grade corporate debt offerings, pricing appears solid: Yields for the fixed-rate notes are said to range from 165bps above comparable Treasurys for the 3-year tranche to 265bps above for the 30-year tranche.
- Verizon, which is also looking to sell ~$14B in other debt to help pay for Vodafone's Verizon Wireless stake, stands to soon have over $152B in debt on its balance sheet, offset by just $5.7B in cash/investments. Big Red is counting on the cash flow benefit that will come from no longer having to issue huge Verizon Wireless dividend payments to Vodafone to help manage its debt load.