Aug. 20 (Bloomberg) -- Verizon Communications Inc. plans to issue as much as $13.3 billion of new notes as part of a debt exchange offer to lower borrowing costs.
Verizon is seeking to take advantage of yields that are near record lows by replacing existing notes. The company issued a record $49 billion in bonds last September to help fund its buyout of Vodafone Group Plc.’s 45 percent stake in Verizon Wireless.
The largest U.S. wireless carrier will issue the notes after holders of existing bonds agreed to swap their debt for the new securities. The company expects to issue as much as $3.3 billion of new notes due in 2020, $4.5 billion of bonds due in 2046 and $5.5 billion of securities due in 2054, according to a statement today distributed by PRNewswire.
Average yields on investment-grade, dollar-denominated corporate bonds fell to 2.98 percent as of yesterday from 3.59 percent in September when New York-based Verizon sold its unprecedented offering, according to the Bank of America Merrill Lynch U.S. Corporate Index.
The company increased the maximum size of the planned debt offering from $12 billion it cited last month.
Moody’s Investors Service said at the time Verizon could save $100 million to $300 million in borrowing costs from the exchange offer. The transaction would be a “positive development for Verizon’s financial flexibility,” according to a report from analysts led by Dennis Saputo, senior vice president at Moody’s in New York.
To contact the reporter on this story: Craig Giammona in New York at email@example.com
To contact the editors responsible for this story: Shannon D. Harrington at firstname.lastname@example.org John Parry, Richard Bravo