TIDMVZC
Verizon Announces Exchange Offers for Certain Outstanding Notes From Eligible
Holders
NEW YORK, Feb. 11, 2015 -- Verizon Communications Inc. ("Verizon") (NYSE,
NASDAQ: VZ; LSE: VZC) today announced the commencement of seven separate
private offers to exchange (the "Exchange Offers") specified series of debt
securities issued by Verizon and by GTE Corporation (a subsidiary of Verizon)
(collectively, the "Old Notes") for new debt securities to be issued by Verizon
(the "New Notes") and, in the case of the 6.94% debentures due 2028 of GTE
Corporation (the "GTE Debentures"), cash in accordance with the terms of the
Exchange Offers.
The Exchange Offers consist of the following:
(a) an offer to exchange the 5.15% notes due 2023 of Verizon for new notes due
2036 of Verizon (the "New Notes due 2036"), provided that the principal
amount of New Notes due 2036 to be issued in such Exchange Offer on an
aggregate basis shall not exceed $3,000,000,000 (the "2036 Maximum
Exchange Amount") (the "2036 Exchange Offer");
(b) (i) an offer to exchange the 6.90% notes due 2038 of Verizon;
(ii) an offer to exchange the 6.40% notes due 2038 of Verizon;
(iii) an offer to exchange the 6.40% notes due 2033 of Verizon;
(iv) an offer to exchange the 6.25% notes due 2037 of Verizon; and
(v) an offer to exchange the GTE Debentures;
in each case, for new notes due 2048 of Verizon (the "New Notes due 2048")
and, in the case of the GTE Debentures, cash, provided that the principal
amount of New Notes due 2048 to be issued in such Exchange Offers on an
aggregate basis shall not exceed $4,500,000,000 (the "2048 Maximum
Exchange Amount") (collectively, the "2048 Exchange Offers"); and
(c) an offer to exchange the 6.55% notes due 2043 of Verizon for new notes due
2055 of Verizon (the "New Notes due 2055"), provided that the principal
amount of New Notes due 2055 to be issued in such Exchange Offer on an
aggregate basis shall not exceed $5,000,000,000 (the "2055 Maximum
Exchange Amount") (the "2055 Exchange Offer"). Each of the 2036 Maximum
Exchange Amount, the 2048 Maximum Exchange Amount and the 2055 Maximum
Exchange Amount is referred to herein as a "Maximum Exchange Amount."
The Exchange Offers are being conducted by Verizon upon the terms and subject
to the conditions set forth in a confidential offering memorandum, dated
February 11, 2015 (the "Offering Memorandum").
The table below lists the series of Old Notes included in the 2036 Exchange Offer:
Principal
CUSIP Amount
Number Title of Security Outstanding
92343VBR4 5.15% notes due 2023 $11,000,000,000
Bloomberg Fixed Spread
Reference U.S. Reference (basis Hypothetical Total Exchange Price
Treasury Security Page points) (1)(2)
2.250% due 11/15/24 FIT1 +108 $1,155.47
The table below lists the series of Old Notes included in the 2048 Exchange Offers:
Principal Bloomberg
CUSIP Amount Reference U.S. Reference
Number Title of Security Outstanding Treasury Security Page
92343VAP9 6.90% notes due 2038(5) $1,250,000,000 3.125% due 8/15/44 FIT1
92343VAK0 6.40% notes due 2038(5) $1,750,000,000 3.125% due 8/15/44 FIT1
92343VBS2 6.40% notes due 2033(5) $4,355,455,000 3.125% due 8/15/44 FIT1
92343VAF1 6.25% notes due 2037(5) $750,000,000 3.125% due 8/15/44 FIT1
362320BA0 6.94% debentures due 2028(6) $800,000,000 3.125% due 8/15/44 FIT1
Composition of Hypothetical
Total Exchange Price
Acceptance Hypothetical Total
Fixed Spread Priority Exchange Price(2)(3) Cash Hypothetical New
(basis points) Level Amount(4) Notes Amount(1)
+178 1 $1,370.92 N/A $1,370.92
+178 2 $1,297.21 N/A $1,297.21
+153 3 $1,297.80 N/A $1,297.80
+167 4 $1,287.77 N/A $1,287.77
+132 5 $1,311.69 $100.00 $1,211.69
The table below lists the series of Old Notes included in the 2055 Exchange Offer:
Principal
CUSIP Amount
Number Title of Security Outstanding
92343VBT0 6.55% notes due 2043 $10,669,606,000
Bloomberg Fixed Spread
Reference U.S. Reference (basis Hypothetical Total Exchange Price
Treasury Security Page points) (1)(2)
3.125% due 8/15/44 FIT1 +183 $1,349.33
(1) Payable in principal amount of the applicable series of New Notes per each
$1,000 princ ipal amount of the specified series of Old Notes validly
tendered and not validly withdrawn at or prior to the Early Participation
Date (as defined below) and accepted for exchange.
(2) Hypothetical Total Exchange Price (as defined below) is based on the fixed
spread for the applicable series of Old Notes to the yield of the Reference
U.S. Treasury Security for that series as of 11:00 a.m. (New York City
time) on February 10, 2015. The information provided in the above tables is
for illustrative purposes only. Verizon makes no representation with
respect to the actual consideration that may be paid, and such amounts may
be greater or less than those shown in the above table depending on the
yield of the applicable Reference U.S. Treasury Security as of the Price
Determination Date (as defined below). Eligible Holders (as defined below)
who validly tender Old Notes of any particular series after the Early
Participation Date, but at or prior to the Expiration Date (as defined
below), will receive the Total Exchange Price for such series minus an
early participation payment, which is equal to $50.00 of principal amount
of the applicable series of New Notes per each $1,000 principal amount of
the applicable series of Old Notes validly tendered and not validly
withdrawn at or prior to the Early Participation Date and accepted for
exchange (the "Early Participation Payment").
(3) Payable in principal amount of the applicable series of New Notes (and in
the case of the GTE Debentures, in a combination of New Notes due 2048 and
the Cash Amount (as defined below)) per each $1,000 principal amount of the
specified series of Old Notes validly tendered and not validly withdrawn at
or prior to the Early Participation Date and accepted for exchange.
(4) Cash payment payable as a portion of the Total Exchange Price equal to
$100.00 per each $1,000 principal amount of GTE Debentures validly tendered
and not validly withdrawn at or prior to the Early Participation Date and
accepted for exchange (the "Cash Amount"). The Cash Amount excludes accrued
and unpaid interest on the GTE Debentures, which will be payable in
addition to the applicable Total Exchange Price. The balance of the Total
Exchange Price for the GTE Debentures is payable in principal amount of New
Notes due 2048 per each $1,000 principal amount of GTE Debentures validly
tendered and not validly withdrawn at or prior to the Early Participation
Date and accepted for exchange.
(5) Issued by Verizon.
(6) Issued by GTE Corporation, a subsidiary of Verizon.
The purpose of the Exchange Offers is (i) to extend the maturity of the debt
obligations associated with the Old Notes during a time of favorable market
conditions, (ii) move the debt obligations associated with the GTE Debentures
from GTE Corporation to Verizon and (iii) more evenly distribute the amount of
principal due on Verizon's debt securities over time.
Subject to the terms and conditions of the 2036 Exchange Offer and the 2055
Exchange Offer, we will accept for exchange the Old Notes validly tendered in
the 2036 Exchange Offer and the 2055 Exchange Offer, respectively, subject to
the 2036 Maximum Exchange Amount and 2055 Maximum Exchange Amount, as
applicable. If the 2036 Maximum Exchange Amount or the 2055 Maximum Exchange
Amount is not adequate to permit the acceptance for exchange of all of the
validly tendered and not validly withdrawn Old Notes for the 2036 Exchange
Offer or the 2055 Exchange Offer, respectively, we will allocate the applicable
Maximum Exchange Amount among the aggregate principal amount of such Old Notes
on a pro rata basis.
Subject to the terms and conditions of the 2048 Exchange Offers, we will accept
for exchange the Old Notes of any series validly tendered in the 2048 Exchange
Offers in accordance with the applicable "Acceptance Priority Level" (in
numerical priority order) for such series as set forth in the table for the
2048 Exchange Offers above (each, an "Acceptance Priority Level"), with
Acceptance Priority Level 1 being the highest priority level. Subject to the
2048 Maximum Exchange Amount, all Old Notes validly tendered in the 2048
Exchange Offers that have a higher Acceptance Priority Level will be accepted
for exchange before any validly tendered Old Notes in the 2048 Exchange Offers
that have a lower Acceptance Priority Level are accepted. If the remaining
available portion of the 2048 Maximum Exchange Amount is not adequate to permit
the acceptance for exchange of all of the validly tendered Old Notes having a
particular Acceptance Priority Level, we will allocate such available 2048
Maximum Exchange Amount among the aggregate principal amount of such validly
tendered Old Notes having such Acceptance Priority Level on a pro rata basis,
and any validly tendered Old Notes having a lower Acceptance Priority Level
will not be accepted for exchange.
The Exchange Offers will expire at 11:59 p.m. (New York City time) on March 11,
2015, unless extended by Verizon (the "Expiration Date"). The Total Exchange
Price for each series of Old Notes, as well as the coupon rate for each series
of New Notes, will be calculated at 11:00 a.m. (New York City time) on February
25, 2015, unless extended by Verizon (the "Price Determination Date").
Eligible Holders that validly tender and do not validly withdraw their Old
Notes at or prior to 5:00 p.m. (New York City time) on February 25, 2015
(unless extended by Verizon, the "Early Participation Date") will be eligible
to receive the applicable Total Exchange Price, which includes the applicable
Early Participation Payment. Eligible Holders of Old Notes who validly tender
after the Early Participation Date, but at or prior to the Expiration Date,
will be eligible to receive the applicable Exchange Price, which is the
applicable Total Exchange Price minus the applicable Early Participation
Payment (the "Exchange Price"). For each series of Old Notes, the Total
Exchange Price and Exchange Price will be paid as specified below.
Tenders of Old Notes in the Exchange Offers may be validly withdrawn at any
time at or prior to 5:00 p.m. (New York City time) on February 25, 2015, unless
extended by Verizon (the "Withdrawal Date"), but not thereafter, unless
additional withdrawal rights are required by law. Subject to applicable law,
Verizon, in its sole discretion, may extend the Early Participation Date or the
Expiration Date for any reason, with or without extending the Withdrawal Date.
The "Total Exchange Price" for each $1,000 principal amount of each series of
Old Notes tendered for exchange, and accepted by Verizon, will be equal to the
price (rounded to the nearest cent per $1,000 principal amount of Old Notes),
determined in accordance with standard market practice, as described in the
Offering Memorandum, that equates to the yield to maturity (the "Exchange Offer
Yield") equal to the sum of:
(i) the yield, as calculated by the lead dealer managers for the Exchange
Offers in accordance with standard market practice, that equates to the
bid-side price of the Reference U.S. Treasury Security specified in the
corresponding tables above for such series of Old Notes appearing at the
Price Determination Date on the Bloomberg reference page specified in the
corresponding tables above for such series of Old Notes (or any other
recognized quotation source selected by the lead dealer managers in their
sole discretion if such quotation report is not available or manifestly
erroneous) plus
the fixed spread specified in the corresponding tables above for such
(ii) series of Old Notes.
The Total Exchange Price payable by Verizon for each $1,000 principal amount of
Old Notes, other than the GTE Debentures, tendered for exchange, and accepted
by Verizon, will consist of a principal amount of the applicable series of New
Notes equal to the applicable Total Exchange Price. The Total Exchange Price
payable by Verizon for each $1,000 principal amount of GTE Debentures tendered
for exchange, and accepted by us, will consist of:
-- the Cash Amount, plus
-- the principal amount of New Notes due 2048 equal to (a) the Total Exchange
Price for the GTE Debentures minus (b) the Cash Amount.
The Exchange Prices will be paid in the same manner as the Total Exchange
Prices except that the principal amount of applicable New Notes will be reduced
by the applicable Early Participation Payment. The Exchange Price payable by us
for each $1,000 principal amount of GTE Debentures tendered for exchange, and
accepted by us, will consist of:
-- the Cash Amount, plus
-- the principal amount of New Notes due 2048 equal to (a) the Total Exchange
Price for the GTE Debentures minus (b) the Early Participation Payment and (c)
the Cash Amount.
In addition to the applicable Total Exchange Price or applicable Exchange
Price, Eligible Holders whose Old Notes are accepted for exchange will be paid
accrued and unpaid interest on such Old Notes to, but not including, the
Settlement Date.
Each series of New Notes will bear interest at a rate per annum equal to the
sum of (i) the yield of the applicable Reference U.S. Treasury Security, as
calculated by the lead dealer managers in accordance with standard market
practice, that equates to the bid-side price of such applicable Reference U.S.
Treasury Security appearing at the Price Determination Date on the applicable
Bloomberg reference page, or any other recognized quotation source selected by
the lead dealer managers in their sole discretion if such quotation report is
not available or manifestly erroneous, plus (ii) the applicable spread for such
series of New Notes, such sum rounded to the third decimal place when expressed
as a percentage. The applicable Reference U.S. Treasury Security, applicable
Bloomberg reference page and applicable spread for each series of New Notes are
as follows:
Reference U.S.
New Notes Treasury Security Bloomberg Reference Page Spread (basis points)
New Notes due 2036 3.125% due 8/15/44 FIT1 +170
New Notes due 2048 3.125% due 8/15/44 FIT1 +195
New Notes due 2055 3.125% due 8/15/44 FIT1 +210
Consummation of the Exchange Offers is subject to the satisfaction of certain
conditions, including certain customary conditions, including the absence of
certain adverse legal and market developments and the Accounting Treatment
Condition (as described in the Offering Memorandum). No Exchange Offer is
conditioned upon any minimum amount of Old Notes being tendered or the
consummation of any other Exchange Offer, and, subject to applicable law, each
Exchange Offer may be amended, extended or terminated individually.
The "Settlement Date" for the Exchange Offers will be promptly following the
Expiration Date and is expected to be March 13, 2015, which is the second
business day after the Expiration Date. Verizon will not receive any cash
proceeds from the Exchange Offers.
The Exchange Offers are being extended only (1) to holders of Old 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 Old 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 Offering
Memorandum) (each of the foregoing, an "Eligible Holder"), and in each case who
have certified in an eligibility letter certain matters to Verizon, including
the above status. Only Eligible Holders who have completed and returned an
eligibility letter are authorized to receive the Offering Memorandum and to
participate in the Exchange Offers. Holders of Old Notes who desire a copy of
the eligibility letter may contact Global Bondholder Services Corporation
toll-free at (866) 470-3800 or at (212) 430-3774 (banks and brokerage firms).
Holders may also obtain and complete an electronic copy of the eligibility
letter on the following website maintained by Global Bondholder Services:
http://gbsc-usa.com/eligibility/verizon
Eligible Holders are advised to check with any bank, securities broker or other
intermediary through which they hold Old 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 Offers before the deadlines specified herein and in the Offering
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 Offering 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. Verizon will enter into a registration rights
agreement with respect to the New Notes.
This press release is not an offer to sell or a solicitation of an offer to buy
any security. The Exchange Offers are being made solely by the Offering
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 Offering 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: adverse conditions in the U.S. and international
economies; the effects of competition in the markets in which we operate;
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; our
high level of indebtedness; 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; material adverse changes in labor matters,
including labor negotiations, and any resulting financial and/or operational
impact; significant increases in benefit plan costs or lower investment returns
on plan assets; changes in tax laws or treaties, or in their interpretation;
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; and the inability to
implement our business strategies.
SOURCE Verizon Communications Inc.
CONTACT: Bob Varettoni, 908-559-6388, robert.a.varettoni@verizon.com
END
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