Verizon Bonds Climb as Tax-Cut Boon May Reduce Debt Leverage

Verizon Communications Inc.’s bonds got a boost Tuesday after the phone company said it will see an increase in cash flow of as much as $4 billion stemming from the U.S. tax reform.

The largest American wireless carrier said it would use the savings to strengthen its balance sheet, which according to Lindsay Gibbons, an analyst at CreditSights, could mean the company will pay down some of its debt. The yield premium, or spread, over Treasuries investors demand to hold Verizon’s 5 percent notes due in 2049 narrowed four basis points to 189 basis points, according to Trace bond-price reporting data. The bond traded at 103.504 cents on the dollar, up from 102.685.