Verizon Communications Inc. (VZ:US), whose $49 billion bond sale six months ago was the largest ever, raised another $4.5 billion today to help fund a tender offer.
The second-largest U.S. phone company issued the debt in five parts, including $500 million of floating-rate securities due in June 2019 and $1.25 billion of 4.15 percent 10-year bonds, according to data compiled by Bloomberg.
Proceeds will be used to help fund a tender offer for bonds due from 2016 to 2018 that pay coupons between 5.5 percent and 8.75 percent, the New York-based company said today in a statement. The tender offer is for as much as $8.2 billion of bonds across eight securities.
The new 10-year notes were sold to pay 140 basis points more than similar-maturity Treasuries, while the floating-rate debt yields 77 basis points more than the three-month London interbank offered rate, Bloomberg data show.
The offering also included $500 million of 2.55 percent notes due in June 2019 paying 95 basis points more than Treasuries and $1 billion of 3.45 percent, seven-year bonds at a spread of 120 basis points, Bloomberg data show. Verizon also sold $1.25 billion of 5.05 percent, 20-year debt with a 135 basis-point spread.
The securities are rated Baa1 by Moody’s Investors Service, according to a report from the ratings company. Citigroup Inc., Mitsubishi UFJ Financial Group Inc., Royal Bank of Canada and Wells Fargo & Co. managed the offering, according to a person with knowledge of the offering, who asked not to be identified because terms aren’t set.
The sale is Verizon’s first bond issue in the U.S. since the record-breaking offering in September, Bloomberg data show. The company issued $500 million of 40-year preferred securities last month.
The phone carrier’s $11 billion of 5.15 percent debentures due 2023 traded at 108.38 cents on the dollar to yield 4.08 percent on March 7, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
AT&T Inc. is the largest U.S. phone company.
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