Verizon Announces Pricing Terms of Exchange Offer
NEW YORK, June 11, 2014 -- Verizon Communications Inc. ("Verizon")
(NYSE, NASDAQ: VZ; LSE: VZC) today announced the pricing terms of its
previously announced private offer to exchange (the "Exchange Offer") up to all
of Cellco Partnership's and Verizon Wireless Capital LLC's (together, "Verizon
Wireless") £600,000,000 outstanding aggregate principal amount of 8.875% Notes
due December 18, 2018 (the "Existing Notes") for Verizon's new
sterling-denominated notes due 2024 (the "New Notes") and an amount of cash.
The interest rate on the New Notes will be 4.073% per annum, determined in
accordance with the procedures set forth in the confidential exchange offer
memorandum, dated May 29, 2014, related to the Exchange Offer (the "Exchange
Offer Memorandum") by reference to the sum (expressed on an annualized basis)
of (i) the yield of the 2.25% United Kingdom Treasury Bond due September 7,
2023, as calculated by the lead dealer manager for the Exchange Offer in
accordance with standard market practice, as of 12:00 noon (London time) on
June 11, 2014, appearing on the U.K. DMO 2 Page as displayed on the Bloomberg
Pricing Monitor, which was 2.732%, and (ii) the New Notes spread, previously
determined at 11:00 a.m. (London time) on June 2, 2014, which was 1.30%.
The total exchange price to be received in the Exchange Offer for each £1,000
principal amount of Existing Notes validly tendered, and not validly withdrawn,
at or prior to the early participation date (11:59 p.m. (New York time) on June
11, 2014, unless extended by Verizon), and accepted for exchange pursuant to
the terms and conditions of the Exchange Offer, is set forth in the table
below. The total exchange price includes the early exchange premium of £50.00
principal amount of New Notes in respect of each £1,000 principal amount of
Existing Notes validly tendered, and not validly withdrawn, at or prior to the
early participation date. The total exchange price for the Exchange Offer has
been determined in accordance with the procedures set forth in the Exchange
Offer Memorandum. Eligible Holders (as defined below) of Existing Notes that
validly tender Existing Notes after the early participation date, but at or
prior to the expiration date (11:59 p.m. (New York time) on June 25, 2014,
unless extended by Verizon), and whose Existing Notes are accepted in the
Exchange Offer, will receive the exchange price, which is the total exchange
price minus the early exchange premium.
The table below shows, among other things, the total exchange price and
exchange price per £1,000 principal amount of Existing Notes accepted in the
Exchange Offer.
Exchange Reference
ISIN Principal Amount Exchange Reference Security
Existing Notes Number Outstanding Security Yield
------------------------------------------------------------------------------------------------------
8.875% Notes due XS0405876672 £600,000,000 UKT 5.00% due 1.546%
18 December 2018, 7 March 2018
issued by Verizon
Wireless
Exchange
Spread
(Basis Exchange Offer Exchange Total Exchange Adjusted Cash New Notes
Points) Yield New Notes Price Price Amount (1) Amount (2)
-------------------------------------------------------------------------------------------------------------
+40 1.955% Notes due £1,245.19 £1,295.19 £40.00 £1,255.19
2024 issued
by Verizon
(1) The "Cash Amount" portion of the total exchange price has been adjusted
(the "Adjusted Cash Amount") from the amount previously announced and reflected
in the Exchange Offer Memorandum in accordance with the adjustment procedure
set forth in the Exchange Offer Memorandum.
(2) The "New Notes Amount" portion of the total exchange price has been
adjusted to account for the Adjusted Cash Amount in accordance with the
adjustment procedure set forth in the Exchange Offer
Memorandum.
In addition to the total exchange price or exchange price, as applicable,
Eligible Holders whose Existing Notes are accepted for exchange will be paid
accrued and unpaid interest on such Existing Notes to, but not including, the
applicable settlement date (rounded down to the nearest £0.01). In the case of
Existing Notes exchanged on the final settlement date, this amount will be
reduced to offset any entitlement to pre-issuance interest that is embedded in
the New Notes to be issued on the final settlement date, as described in the
Exchange Offer Memorandum.
Tenders of Existing Notes in the Exchange Offer may be validly withdrawn at any
time at or prior to 11:59 p.m. (New York time) on June 11, 2014, unless
extended by Verizon, but not thereafter, unless additional withdrawal rights
are required by law. The early settlement date is expected to be June 18, 2014,
and will apply to all Existing Notes validly tendered, and not validly
withdrawn, at or prior to the early participation date, and accepted for
exchange pursuant to the terms and conditions of the Exchange Offer.
The Exchange Offer will expire at 11:59 p.m. (New York time) on June 25, 2014,
unless extended by Verizon. The final settlement date is expected to be June
27, 2014, and will apply to all Existing Notes validly tendered after the early
participation date, but at or prior to the expiration date, and accepted for
exchange pursuant to the terms and conditions of the Exchange Offer.
The complete terms of the Exchange Offer are described in the Exchange Offer
Memorandum. Verizon reserves the right, subject to applicable law, to extend,
terminate or otherwise amend the terms of the Exchange Offer.
The Exchange Offer is being conducted by Verizon upon the terms and subject to
the conditions set forth in the Exchange Offer Memorandum. The Exchange Offer
is being extended only (1) to holders of Existing Notes that are "Qualified
Institutional Buyers" as defined in Rule 144A under the U.S. Securities Act of
1933, as amended (the "U.S. Securities Act"), in a private transaction in
reliance upon the exemption from the registration requirements of the U.S.
Securities Act provided by Section 4(a)(2) thereof and (2) outside the United
States, to holders of Existing Notes other than "U.S. persons" (as defined in
Rule 902 under Regulation S of the U.S. Securities Act) and who are not
acquiring New Notes for the account or benefit of a U.S. person, in offshore
transactions in compliance with Regulation S under the U.S. Securities Act, and
who are "Non-U.S. qualified offerees" (as defined in the Exchange Offer
Memorandum) (each of the foregoing, an "Eligible Holder").
Eligible Holders are advised to check with any bank, securities broker or other
intermediary through which they hold Existing Notes as to when such
intermediary needs to receive instructions from an Eligible Holder in order for
that Eligible Holder to be able to participate in, or (in the circumstances in
which revocation is permitted) revoke their instruction to participate in, the
Exchange Offer before the deadlines specified herein and in the Exchange Offer
Memorandum. The deadlines set by each clearing system for the submission and
withdrawal of exchange instructions will also be earlier than the relevant
deadlines specified herein and in the Exchange Offer Memorandum.
If and when issued, the New Notes will not be registered under the U.S.
Securities Act or any state securities laws. Therefore, the New Notes may not
be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the U.S. Securities Act and any
applicable state securities laws.
This press release is not an offer to sell or a solicitation of an offer to buy
any security. The Exchange Offer is being made solely by the Exchange Offer
Memorandum and only to such persons and in such jurisdictions as is permitted
under applicable law.
This communication has not been approved by an authorized person for the
purposes of Section 21 of the Financial Services and Markets Act 2000, as
amended (the "FSMA"). Accordingly, this communication is not being directed at
persons within the United Kingdom save in circumstances where section 21(1) of
the FSMA does not apply.
In particular, this communication is only addressed to and directed at: (A) in
any Member State of the European Economic Area that has implemented the
Prospectus Directive (as defined below), qualified investors in that Member
State within the meaning of the Prospectus Directive and (B) (i) persons that
are outside the United Kingdom or (ii) persons in the United Kingdom falling
within the definition of investment professionals (as defined in Article 19(5)
of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
(the "Financial Promotion Order")) or within Article 43 of the Financial
Promotion Order, or to other persons to whom it may otherwise lawfully be
communicated by virtue of an exemption to Section 21(1) of the FSMA or
otherwise in circumstance where it does not apply (such persons together being
"relevant persons"). The New Notes are only available to, and any invitation,
offer or agreement to subscribe, purchase or otherwise acquire such New Notes
will be engaged in only with, relevant persons. Any person who is not a
relevant person should not act or rely on the Exchange Offer Memorandum or any
of its contents. For purposes of the foregoing, the "Prospectus Directive"
means the Prospectus Directive 2003/71/EC, as amended, including pursuant to
Directive 2010/73/EU.
Cautionary Statement Regarding Forward-Looking Statements
In this communication we have made forward-looking statements. These
statements are based on our estimates and assumptions and are subject to risks
and uncertainties. Forward-looking statements include the information
concerning our possible or assumed future results of operations.
Forward-looking statements also include those preceded or followed by the words
"anticipates," "believes," "estimates," "hopes" or similar expressions. For
those statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. The following important factors, along with those discussed
in our filings with the Securities and Exchange Commission (the "SEC"), could
affect future results and could cause those results to differ materially from
those expressed in the forward-looking statements: the ability to realize the
expected benefits of our transaction with Vodafone in the timeframe expected or
at all; an adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations or adverse conditions in the credit
markets affecting the cost, including interest rates, and/or availability of
further financing; significantly increased levels of indebtedness as a result
of the Vodafone transaction; changes in tax laws or treaties, or in their
interpretation; adverse conditions in the U.S. and international economies;
material adverse changes in labor matters, including labor negotiations, and
any resulting financial and/or operational impact; material changes in
technology or technology substitution; disruption of our key suppliers'
provisioning of products or services; changes in the regulatory environment in
which we operate, including any increase in restrictions on our ability to
operate our networks; breaches of network or information technology security,
natural disasters, terrorist attacks or acts of war or significant litigation
and any resulting financial impact not covered by insurance; the effects of
competition in the markets in which we operate; changes in accounting
assumptions that regulatory agencies, including the SEC, may require or that
result from changes in the accounting rules or their application, which could
result in an impact on earnings; significant increases in benefit plan costs or
lower investment returns on plan assets; and the inability to implement our
business strategies.
SOURCE Verizon Communications Inc.
CONTACT: Bob Varettoni,
908-559-6388, robert.a.varettoni@verizon.com