Verizon Launches $49 Billion Largest Bond Deal Ever; Postpones Europe Investor Meetings

Verizon Launches $49 Billion Largest Bond Deal Ever; Postpones Europe Investor Meetings

Smashing the previous record $17 billion deal from Apple which is doing so badly (in yield and spread terms), Verizon – in order to fund the mega deal with Vodafone – is launching an 8-part $49 billion deal done at what appear reasonable spread levels (though spreads are dramatically wider than a month ago as one would expect for such a releveraging). With the bulk of the deal ($36 billion) maturing 7 years or longer, it would appear that (and desk chatter confirms) demand was relatively high and BofAML also notes that Verizon will now have a huge $69 to $79 billion of index-eligible bonds. This will make Verizon the 4th largest issuer in the US high-grade market index, right up their with Goldman Sachs and Citigroup.

  • $4.25b 3Y fixed launch at +165bps
  • $2.25 3Y FRN launch at 3mL +153bps
  • $4.75b 5Y fixed launched at +190bps
  • $1.75b 5Y FRN launch at 3mL +175bps
  • $4b 7Y notes launch at +215bps
  • $11b 10Y notes launch at +225bps
  • $6b 20Y bonds launch at +250bps
  • $15b 30Y bonds launch at +265bps

Amid all this exuberance though, something odd popped up:


Reuters is reporting that with a $101 billion order book already, it appears they had no ned to shop the deal in Europe. Amazing what ZIRP repression will do…

Via Bloomberg,

Meetings in Europe about the Vodafone deal, which were scheduled to take place on Sept. 12 and 13, are now postponed.
Meetings were scheduled to discuss Verizon’s acquisition of Vodafone’s 45% stake in Verizon Wireless
Meetings were arranged by Barclays, Bank of America Merrill Lynch, JP Morgan and Morgan Stanley

This huge jump in debt has not gone unnoticed in CDS land – but today we are seeing ‘relief’ as pre-issue anxiety gives way to “well the market soaked it up” and primary positives are repricing secondaries…

We just hope things go better than they did for AAPL’s big bond issues…

Also given the size of the deal, it may go a long way to explaining last week’s Treasury market blow up as underwriters jumped at rate-locks to prepare for the huge issue.

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