REG-VerizonCommunication: Verizon Announces Pricing Terms of Exchange Offers <Origin Href="QuoteRef">VZ.N</Origin>
26/02/2015 07:00
Verizon Announces Pricing Terms of Exchange Offers
NEW YORK, Feb. 26, 2015 -- Verizon Communications Inc. ("Verizon")
(NYSE, NASDAQ: VZ; LSE: VZC) today announced the pricing terms of its
previously announced 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,
each 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"), including, in the case of the
2048 Exchange Offers, the acceptance priority levels and, in the case of all
Exchange Offers, possible proration, as described in the Offering Memorandum.
The tables below indicate, among other things, the Total Exchange Price (as
defined below) for each $1,000 principal amount of each series of Old Notes
accepted in the Exchange Offers (as calculated at 11:00 a.m. (New York City
time) on February 25, 2015 (the "Price Determination Date") in accordance with
the Offering Memorandum):
2036 Exchange Offer
Reference
U.S. Yield of Reference U.S.
CUSIP Title of Treasury Treasury Security at Price Fixed Spread Exchange Total
Number Security Security Determination Date (basis points) Offer Yield Exchange Price(1)
5.15% notes 2.250%
92343VBR4 due 2023 due 11/15/24 1.975% +108 3.055% $1,155.88
2048 Exchange Offers
Composition of
Total Exchange
Price
Reference Fixed New
U.S. Yield of Reference U.S. Spread Exchange Total Cash Notes
CUSIP Title of Treasury Treasury Security at Price (basis Offer Exchange Amount Amount
Number Security Security Determination Date points) Yield Price(2) (3) (1)
6.90% notes 3.125%
92343VAP9 due 2038(4) due 8/15/44 2.572% +178 4.352% $1,368.75 N/A $1,368.75
6.40% notes 3.125%
92343VAK0 due 2038(4) due 8/15/44 2.572% +178 4.352% $1,295.14 N/A $1,295.14
6.40% notes 3.125%
92343VBS2 due 2033(4) due 8/15/44 2.572% +153 4.102% $1,295.96 N/A $1,295.96
6.25% notes 3.125%
92343VAF1 due 2037(4) due 8/15/44 2.572% +167 4.242% $1,285.74 N/A $1,285.74
6.94% 3.125%
362320BA0 debentures due 8/15/44 2.572% +132 3.892% $1,310.24 $100.00 $1,210.24
due 2028(5)
2055 Exchange Offer
Reference Fixed
U.S. Yield of Reference U.S. Spread Exchange Total
CUSIP Title of Treasury Treasury Security at Price (basis Offer Exchange
Number Security Security Determination Date points) Yield Price(1)
6.55% notes 3.125% 2.572% +183 4.402% $1,346.92
92343VBT0 due 2043 due 8/15/44
(1) Payable in principal amount of the applicable series of New Notes 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
(as defined below) and accepted for exchange. The Total Exchange Price for
each series of Old Notes is inclusive of the applicable Early Participation
Payment for such series.
(2) 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.
(3) 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.
(4) Issued by Verizon.
(5) Issued by GTE Corporation, a subsidiary of Verizon.
The table below indicates the interest rate (the "New Notes Coupon") for each
series of New Notes to be issued by Verizon pursuant to the Exchange Offers (as
calculated at the Price Determination Date in accordance with the Offering
Memorandum):
Reference
U.S.
Treasury Yield of Reference U.S. Treasury Security at Spread New Notes
New Notes Security Price Determination Date (basis points) Coupon
New Notes 3.125% due 2.572% +170 4.272%
due 2036 8/15/44
New Notes 3.125% due 2.572% +195 4.522%
due 2048 8/15/44
New Notes 3.125% due 2.572% +210 4.672%
due 2055 8/15/44
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"). Eligible Holders (as
defined below) 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 (as the same
may be extended by Verizon, the "Early Participation Date") will be eligible to
receive the applicable Total Exchange Price (the "Total Exchange Price") set
forth in the corresponding tables above, which includes the applicable early
participation payment for the tendered Old Notes set forth in the Offering
Memorandum (the "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"), as set forth in the corresponding
tables above. For each series of Old Notes, other than the GTE Debentures, the
Total Exchange Price and Exchange Price will be paid in a principal amount of
applicable New Notes equal to such Total Exchange Price or Exchange Price,
respectively. For the GTE Debentures, the Total Exchange Price will consist,
in part, of a cash payment 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
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. The Exchange Price for the GTE
Debentures will be paid in the same manner as the Total Exchange Price except
that the principal amount of New Notes due 2048 will be reduced by the
applicable Early Participation Payment.
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.
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 (as defined below).
Consummation of the Exchange Offers is subject to the satisfaction of certain
conditions, including (1) certain customary conditions, including the absence
of certain adverse legal and market developments and (2) 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).
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
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