Verizon Said to Set Rate on $14 Billion of Vodafone Loans

Verizon Communications Inc. (VZ) set the rate on $14 billion of loans it’s seeking to back its purchase of a stake in its wireless unit from Vodafone Group Plc (VOD), according to a person with knowledge of the transaction.

A $6 billion term loan due in three years will pay interest at 1.375 percentage points more than the London interbank offered rate, while a $6 billion term loan maturing in five years will have a rate of 1.5 percentage points more than Libor, according to the person, who asked not to be identified because they are not authorized to speak publicly.

The financing, being arranged JPMorgan Chase & Co., Morgan Stanley, Bank of America Corp. and Barclays Plc, also includes a $2 billion revolving credit line that will pay interest at 1.25 percentage points more than the benchmark borrowing rate.

Verizon, rated Baa1 at Moody’s Investors Service and BBB+ at Standard & Poor’s, is buying Vodafone’s Verizon Wireless stake for $130 billion to gain full control of the most profitable U.S. mobile-phone carrier.

A meeting with lenders to discuss the financing is scheduled for tomorrow at 8:30 a.m. in New York, according to the person. Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.

To contact the reporters on this story: Christine Idzelis in New York at cidzelis@bloomberg.net; Jeannine Amodeo in New York at jamodeo3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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