Verizon Raises $49 Billion in Largest Corporate-Bond Sale

Verizon Communications Inc. (VZ) sold $49 billion of bonds in eight parts in the biggest company debt offering ever.

The second-biggest U.S. telephone carrier issued fixed-rate debt with maturities ranging from three to 30 years as well as two portions of floating-rate securities, according to data compiled by Bloomberg. Verizon paid a premium for the size of its sale, selling a 10-year portion with a relative yield of 47 basis points more than investors demand to own bonds with similar maturities and BBB ratings, according to Bloomberg data.

The deal, which is about the size of all outstanding obligations of the Slovak Republic, is helping to fund New York-based Verizon’s buyout of partner Vodafone Group Plc. (VOD)’s 45 percent stake in the largest and most profitable U.S. wireless carrier, Verizon Wireless. The sale is more than double the previous issuance record of $17 billion from Apple Inc. sold in April.

Verizon sold $4.25 billion of 2.5 percent, three-year fixed-rate notes to yield 165 basis points more than similar-maturity Treasuries; $4.75 billion of 3.65 percent, five-year debt that pays a spread of 190 basis points and $4 billion of 4.5 percent, seven-year securities yielding 215 basis points more than benchmarks, Bloomberg data show.

The company also issued $11 billion of 5.15 percent, 10-year debt at a 225 basis-point spread; $6 billion of 6.4 percent, 20-year notes paying 250 basis points; and $15 billion of 6.55 percent, 30-year bonds at 265, the data show.

Floating Notes

Verizon sold $2.25 billion of three-year floating-rate notes at a spread of 153 basis points more than the three-month London interbank offered rate and $1.75 billion of five-year floaters at 175 basis points more than Libor, Bloomberg data show.

The 30-year securities, the biggest corporate bond ever issued, traded as high as 107.6 cents on the dollar as of 1:12 p.m. in New York from an issue price of 99.883 cents, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

The sale was managed by Barclays Plc, Bank of America Corp., JPMorgan Chase & Co. and Morgan Stanley, Verizon said in regulatory filings.

Libor, the rate at which banks say they can borrow from each other, was set today at 25.44 basis points. A basis point is 0.01 percentage point.

To contact the reporter on this story: Matt Robinson in New York at mrobinson55@bloomberg.net

To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net;

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