STOCK MARKET WATCH -- Friday, 13 September 2013

[Demeter]

8. Verizon nears record $45-$49 billion bond deal

http://www.reuters.com/article/2013/09/10/verizon-bond-guidance-idUSL2N0H60ZA20130910

Verizon Communications is expected to sell between $45 billion to $49 billion in bonds on Wednesday to finance the $130 billion buyout of its wireless operations, making it the biggest corporate issue on record by some distance. The deal, which attracted over $90 billion of orders on Tuesday after the company opted for size over tight pricing, will dwarf Apple's record-setting US$17bn offering issued in late April.

A source with knowledge of the deal said "Verizon preferred to just get it all out of the way so there isn't an overhang of another potential big deal in the market."

The overwhelming response to the offering follows Verizon's decision to offer bargain basement prices for the notes, to ensure it raises the bulk of the $49 billion of multi-currency bonds it needs to help pay Vodafone for its 45% stake in Verizon Wireless.

The world's biggest telecom company shocked the market by offering investors official price guidance in line with initial talk, which was set purposely so cheap that investors couldn't refuse the offer. Pricing of the deal is scheduled between 8am and 11am on Wednesday. Investors are hearing that it will raise between $13 billion to $15 billion in fixed and floating rates bonds with three- and five-year maturities, $15 billion from 7-year and 10-year bonds and between $18 billion to $20 billion in 20- and 30- year bonds.

"We are hearing that the 10 year will likely be twice as big as the seven-year and the 30-year about twice as big as the 20-year," a source said.

Guidance on some of the longer-dated tranches were a whopping 135 basis points wider than where Verizon's existing bonds in comparable maturities were trading in late August, and before news of its acquisition was leaked. Orders on the eight-tranches came thick and fast throughout the morning, growing from $30 billion at 9am EST to triple that number by the time order books closed...

TO FIND OUT WHAT THEY WANT TO DO WITH THAT MONEY, SEE LINK