Verizon Said to Plan Up to $50 Billion of Bonds for Mobile Unit
Verizon Communications Inc. (VZ) will probably issue $40 billion to $50 billion of bonds to help finance its purchase of Vodafone Group Plc’s 45 percent stake in Verizon Wireless, according to a person briefed on its plans.
A first offering may exceed Apple Inc.’s record $17 billion issue in April, said the person, who asked not to be identified, citing lack of authorization to speak publicly. Along with borrowing in dollars, Verizon also plans to sell notes in British pounds and euros, the person said.
Issuance of that amount would surpass an earlier estimate by Barclays Plc analysts Danish Agboatwala and Parth Shah, who last week said as much as $30 billion in bonds may be sold, including $20 billion on dollar-denominated debt and $5 billion to $10 billion in notes in other currencies.
Bob Varettoni, a Verizon spokesman, declined to comment on the company’s debt sale plans.
The $130 billion transaction would give Verizon full control of the most profitable U.S. mobile-phone carrier. JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp. and Barclays are supplying a $61 billion bridge credit facility, which Verizon plans to reduce “with the issuance of permanent financing,” the New York-based carrier said yesterday in a statement.
Verizon said it expects to maintain finances that are consistent with investment-grade credit. Moody’s Investors Service lowered its rank one level yesterday to Baa1, three levels above speculative grade, to reflect an increase in leverage, and Standard & Poor’s cut its rating to an equivalent BBB+.
The Wall Street Journal reported the potential size of the offerings yesterday on its website.
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