Cellco/Verizon Wireless To Sell New 2014 Bonds - Source
January 30 2009 - 10:01AM
Dow Jones News
Cellco Partnership/Verizon Wireless Capital is in the
investment-grade corporate bond market Friday with a new
benchmark-sized offering, according to a person familiar with the
deal.
The deal comes just a day after highly rated companies sold $16
billion in new bonds, as borrowers jostle to capitalize on renewed
investor confidence.
Proceeds of the Cellco Partnership/Verizon Wireless' bonds,
which will mature in February 2014, will be used to repay a portion
of the money the company borrowed in June to support its
acquisition of regional telecoms group, Alltel (AT) from
private-equity firm TPG and Goldman Sachs Group Inc. (GS),
according to the person.
The amount of bonds to be sold is still being determined, but
the benchmark-size means that Cellco Partnership/Verizon Wireless
Capital is planning to sell at least $500 million of bonds. One
investor looking at the deal said, however, he expects the company
to raise at least $1 billion with this transaction.
He added that he anticipates the new bonds to price with a
spread of about 400 basis points over risk-free Treasurys. Official
price guidance has not yet been released. But for comparison,
fellow telecommunications company AT&T Inc. (T) sold $5.5
billion of bonds in three parts Thursday. One tranche of the deal
was a $1 billion 4.85% bond due 2014. That priced at a discount to
par value at 99.994 to give a 4.851% yield and a spread of 300
basis points over Treasurys.
Citigroup, Morgan Stanley and Royal Bank Of Scotland are joint
lead managers on Cellco Partnership/Verizon Wireless' bond deal.
They were also part of the seven-strong bank group which sold about
$2.4 billion of bonds to investors in Europe for the company in
December.
Cellco Partnership is a Delaware general partnership doing
business as Verizon Wireless. Verizon Communications, Inc. owns 55%
of the partnership, while the U.K.'s Vodafone Group PLC (VOD.LN)
owns 45%, according to Fitch Ratings.
-By Kate Haywood, Dow Jones Newswires; 201-938-2348;
kate.haywood@dowjones.com
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