Verizon Subsidiary Raises $480 Million In Retail Bond Offering
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NEW YORK -- Verizon Communications Inc. (NYSE:VZ) announced that its wholly owned subsidiary Verizon New England Inc. today closed a $480 million offering for 40-year retail bonds.
These debt securities, known as Quarterly Interest Bonds Due 2042, were sold in increments of $25 and have a coupon yield of 7.0 percent. The bonds are callable by the company at par starting on May 10, 2007. The company intends to apply to have the bonds listed on the New York Stock Exchange and expects trading in the bonds to begin by mid-June.
Verizon launched the bond offering on April 26 to raise $300 million, but the company said it increased the deal size in response to strong investor demand and the attractive interest rate on the 40-year financing. Pricing was set on May 1.
"Investors were very receptive to Verizon, allowing us to increase the size of our initial offering while keeping the coupon at the low end of the marketed range," said Bill Heitmann, Verizon treasurer. "This shows the continued strong access that Verizon has to capital markets. Since this was a retail offering, it also shows that we have a diversified capital market base that extends beyond institutional investors. Verizon continues to be opportunistic in meeting funding requirements, and we have the financial flexibility to execute on our debt-management strategy."
Verizon plans to use the proceeds to reduce short-term debt and for general corporate purposes.
Morgan Stanley managed the sale of the bonds on behalf of a group of underwriters. Verizon New England carries investment-grade ratings: Standard & Poor's, A+; Moody's, Aa2; and Fitch, AA.
Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 133.8 million access line equivalents and approximately 29.6 million wireless customers. Verizon is also the largest directory publisher in the world. With more than $67 billion in annual revenues and nearly 248,000 employees, Verizon's global presence extends to more than 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.
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