Verizon set for $49 billion bond sale

11 September 2013 | Kavit Majithia


US operator Verizon is to sell $49 billion-worth of bonds in one of the largest debt sales in history.

The operator is reportedly using the debt sale to raise funds for its upcoming $130 billion acquisition of the 45% stake of Verizon Wireless it does not already own.

Eleven banks are involved in the debt sale, with the current record – Apple’s $17 billion bond sale from earlier this year – expected to be smashed.

The Financial Times says the summer has been “torrid” for corporate debt, with strong demand for bonds expected as a result.

A successful Verizon sale is expected to fuel a rebound for corporate bonds, with the company expected to sell a combination of fixed and floating-rate debt across six maturities, between three and 30 years.

Verizon is reportedly offering higher yields than for existing bonds in a bid to entice investors. The ten-year bond offer could reach $15 billion, which is higher than similar maturities.

Reports suggest that investors interested in the bonds include pension funds, insurance companies and hedge funds, in addition to Asian and Middle Eastern investors.

The bond sale is being managed by Barclays, Bank of America Merrill Lynch, JP Morgan and Morgan Stanley.