Verizon Communications Inc. (VZ) is meeting lenders Sept. 12 to discuss $14 billion in loans to help finance its purchase of a stake in its wireless unit from Vodafone Group Plc (VOD), according to a person with knowledge of the transaction.
The debt will consist of $12 billion of term loans, including a $6 billion portion due in three years and a $6 billion piece maturing in five, said the person, who asked not to be identified because they weren’t authorized to speak publicly. The financing also includes a $2 billion revolving credit line.
Verizon is buying Vodafone’s Verizon Wireless stake for $130 billion to gain full control of the most profitable U.S. mobile-phone carrier. The New York-based company is seeking a mix of loans and bonds to replace a $61 billion bridge financing commitment it got from JPMorgan Chase & Co., Bank of America Corp., Barclays Plc and Morgan Stanley, according to data compiled by Bloomberg.
Verizon, which has ratings of Baa1 at Moody’s Investors Service and BBB+ at Standard & Poor’s, is also planning to meet with bond investors in Europe and the U.S. next week as may raise as much as $50 billion to help repay the bridge financing.
Bridge loans usually mature in one year and are often used as backstops to bond offerings or longer-dated bank debt. Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.
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