Verizon announces accepted amounts and pricing terms of its tender offers for five series of its debt securities
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Insights
Verizon Communications Inc.'s announcement regarding the purchase of its outstanding debt securities is a strategic financial maneuver with implications for the company's capital structure and liquidity management. The acceptance of the tender offers for the debt securities indicates a proactive approach to managing the company's debt profile. By repurchasing debt with a fixed spread, Verizon is potentially reducing its future interest obligations, which can lead to interest expense savings and an improved debt-to-equity ratio. However, this could also imply that the company is taking advantage of the current interest rate environment to lower its cost of capital.
It is noteworthy that the offers reached the Maximum Principal Amount by the Early Participation Date, eliminating the need for a Final Settlement Date. This suggests strong investor interest in the offer and a favorable reception by the market. The early settlement could provide Verizon with immediate balance sheet benefits. However, the repurchase of debt will use a significant amount of cash, which may affect the company's short-term liquidity. Investors should monitor how this cash outflow impacts Verizon's cash reserves and whether it aligns with the company's overall financial strategy.
The debt repurchase initiative by Verizon can be interpreted as a signal of financial strength and a commitment to maintaining a healthy balance sheet. From a market perspective, the timing and terms of the offers may influence Verizon's stock performance as they reflect the company's creditworthiness and market conditions. The fixed spreads and offer yields provided in the announcement indicate the premium Verizon is willing to pay over the respective mid-swap rates, which is a benchmark for the cost of borrowing in the euro-denominated bond market.
Investors and analysts often view debt repurchase programs as a positive sign, as they can lead to an improved credit rating and potentially lower borrowing costs in the future. However, the market's reaction will also depend on Verizon's future plans for capital allocation, including investments in growth opportunities and shareholder returns. The repurchase may also affect the liquidity and market pricing of the remaining notes not tendered in the offer.
The announcement by Verizon highlights several legal and regulatory considerations. The offers are subject to specific terms and conditions, as well as compliance with securities and blue sky laws, which govern the offering and sale of securities to protect investors. Verizon's adherence to these laws is critical to avoid legal repercussions and to ensure the offers are conducted fairly and transparently.
Furthermore, the communication stipulates that the offers are not available to all note holders, such as those in jurisdictions where securities laws restrict such transactions. The exclusion of certain investors based on jurisdiction underscores the importance of regulatory compliance in international financial transactions. Verizon's appointment of lead dealer managers and co-dealer managers, as well as a tender and information agent, indicates a structured approach to managing the complexities of the offers and ensuring adherence to the necessary legal frameworks.
NEW YORK, Feb. 29, 2024 (GLOBE NEWSWIRE) -- Verizon Communications Inc. (“Verizon”) (NYSE, NASDAQ: VZ) today announced the accepted amounts and pricing terms of its previously announced five separate offers to purchase the outstanding series of debt securities listed in the table below (collectively, the “Notes”) up to an aggregate principal amount of
The “Early Participation Date” was 4:00 p.m. (London time) on February 28, 2024. Withdrawal rights for the Offers expired at 4:00 p.m. (London time) on February 28, 2024. The Offers will each expire at 4:00 p.m. (London time) on March 14, 2024, unless extended by Verizon.
As previously announced all conditions to the Offers were deemed satisfied by Verizon by the Early Participation Date, or were timely waived by Verizon.
The Notes tendered and not validly withdrawn at or prior to the Early Participation Date that have been accepted for purchase are indicated in the table below. Verizon will settle all Notes validly tendered and not validly withdrawn at or prior to the Early Participation Date and accepted for purchase, on March 4, 2024 (the “Early Settlement Date”). Because the amount of Notes validly tendered at or prior to the Early Participation Date reached the Maximum Principal Amount, there will be no Final Settlement Date (as defined in the Offer to Purchase) and no Notes tendered after the Early Participation Date will be accepted for purchase. All tendered Notes that are not accepted for purchase will be promptly returned to the tendering holder.
The table below indicates, among other things, with respect to each series of Notes validly tendered at or prior to the Early Participation Date and accepted for purchase, (1) the aggregate principal amount of the Notes of each series tendered in each Offer, (2) the aggregate principal amount of the Notes of each series accepted in each Offer, (3) the Offer Yield (as defined below), as applicable and (4) the total consideration for each
| Acceptance Priority Level | ISIN / Common Code | Title of Security | Principal Amount Outstanding | Principal Amount Tendered as of the Early Participation Date | Principal Amount Accepted for Purchase | Fixed Spread (basis points) | Offer Yield(1) | Total Consideration(2) |
| 1 | XS1405766897 / 140576689 | -10 | ||||||
| 2 | XS1708161291 / 170816129 | +20 | ||||||
| 3 | XS1030900242 / 103090024 | +0 | ||||||
| 4 | XS1979280853 / 197928085 | +30 | ||||||
| 5 | XS1405766624 / 140576662 | +45 | ||||||
(1) The “Offer Yield” is equal to the sum of (a) the applicable Mid-Swap Rate (as defined in the Offer to Purchase), as calculated by the lead dealer managers, plus (b) the Fixed Spread (as specified in Verizon’s press release dated February 14, 2024 announcing the Offers) for the applicable series of Notes.
(2) Payable per each
The applicable Total Consideration that will be paid on the Early Settlement Date for each series of Notes accepted for purchase includes an early participation payment of
Verizon has retained Barclays Bank PLC, BNP Paribas, Deutsche Bank AG, London Branch and J.P. Morgan Securities plc to act as lead dealer managers for the Offers and Banco Santander, S.A., CastleOak Securities, L.P., SMBC Nikko Capital Markets Limited, The Toronto-Dominion Bank, Bancroft Capital, LLC and Tigress Financial Partners, LLC to act as co-dealer managers for the Offers. Questions regarding terms and conditions of the Offers should be directed to Barclays Bank PLC at +44 (0)20 3134-8515, BNP Paribas at +33 1 55 77 78 94, Deutsche Bank AG, London Branch at +44 (0)20 7545-8011 or J.P. Morgan Securities plc at +44 (0)20 7134-2468.
Kroll Issuer Services Limited is acting as the Tender Agent and the Information Agent for the Offers. Questions or requests for assistance related to the Offers or for additional copies of the Offer to Purchase may be directed to Kroll Issuer Services Limited by email at verizon@is.kroll.com or by telephone at +44 20 7704 0880. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offers.
This announcement is for informational purposes only. This announcement is not an offer to purchase or a solicitation of an offer to sell any Notes. The Offers are being made solely pursuant to the Offer to Purchase. The Offers are not being made to Holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Offers to be made by a licensed broker or dealer, the Offers will be deemed to be made on behalf of Verizon by the dealer managers or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.
This communication and any other documents or materials relating to the Offers have 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 announcement is not being distributed to, and must not be passed on to, persons within the United Kingdom save in circumstances where section 21(1) of the FSMA does not apply. Accordingly, this communication is only addressed to and directed at (i) persons who are outside the United Kingdom, or (ii) persons 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 (iii) within Article 43 of the Financial Promotion Order, or (iv) high net worth companies and other persons to whom it may lawfully be communicated falling within Article 49(2)(a) to (d) of the Financial Promotion Order (such persons together being “relevant persons”). Any person who is not a relevant person should not act or rely on any document relating to the Offers or any of their contents.
This communication and any other documents or materials relating to the Offers are only addressed to and directed at persons in member states of the European Economic Area (the “EEA”), who are “Qualified Investors” within the meaning of Article 2(1)(e) of Regulation (EU) 2017/1129. The Offers are only available to Qualified Investors. None of the information in the Offer to Purchase and any other documents and materials relating to the Offers should be acted upon or relied upon in any member state of the EEA by persons who are not Qualified Investors.
Each Holder participating in the Offers has given certain representations in respect of the jurisdictions referred to above and generally as set out herein. Any tender of Notes for purchase pursuant to the Offers from a Holder that is unable to make these representations is not valid. Each of Verizon, the Dealer Managers, the Tender Agent and the Information Agent reserves the right, in its absolute discretion, to investigate, in relation to any tender of Notes for purchase pursuant to the Offers, whether any such representation given by a Holder is correct and, if such investigation is undertaken and as a result Verizon determines (for any reason) that such representation is not correct, such tender is not valid.
Cautionary statement regarding forward-looking statements
In this communication Verizon has made forward-looking statements, including regarding the conduct and completion of the Offers. These forward-looking statements are not historical facts, but only predictions and generally can be identified by use of statements that include phrases such as “will,” “may,” “should,” “continue,” “anticipate,” “assume,” “believe,” “expect,” “plan,” “appear,” “project,” “estimate,” “intend,” “target,” “forecast,” or other words or phrases of similar import. Similarly, statements that describe our objectives, plans or goals also are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those currently anticipated, including those discussed in the Offer to Purchase under the heading “Risk Factors” and under similar headings in other documents that are incorporated by reference in the Offer to Purchase. Holders are urged to consider these risks and uncertainties carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this press release are made only as of the date of this press release, and Verizon undertakes no obligation to update publicly these forward-looking statements to reflect new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events might or might not occur. Verizon cannot assure you that projected results or events will be achieved.
Media contact:
Eric Wilkens
eric.wilkens@verizon.com
FAQ
What is the Maximum Principal Amount announced by Verizon for the Offers?
When will the Offers expire?
When is the Early Settlement Date for the Notes accepted for purchase?
Who are the lead dealer managers for the Offers?
What does the Total Consideration include for each series of Notes accepted for purchase?
