Summary
Verizon Communications Inc. (VZ) announced through its subsidiary, Cellco Partnership (Verizon Wireless), the repayment of its outstanding borrowings under a $7.55 billion credit agreement. This action, taken on November 13, 2008, signals a proactive approach to managing its debt obligations ahead of the agreement's June 2009 maturity date. The company is demonstrating financial discipline and flexibility by clearing these short-term debts. Furthermore, Verizon Wireless successfully issued $3.5 billion in new notes, comprising $1.25 billion in 7.375% notes due 2013 and $2.25 billion in 8.500% notes due 2018. The proceeds from this issuance are earmarked to finance a portion of the acquisition of Alltel Corporation and related expenses. This strategic move underscores Verizon's commitment to its growth initiatives, particularly the significant Alltel acquisition, while also providing flexibility for general corporate purposes if the acquisition does not proceed. Investors should monitor the integration of Alltel and its impact on Verizon's financial performance and debt levels.
Key Highlights
- 1Verizon Wireless repaid its $7.55 billion credit facility ahead of its June 2009 maturity.
- 2Verizon Wireless issued $1.25 billion in 7.375% notes due 2013.
- 3Verizon Wireless issued $2.25 billion in 8.500% notes due 2018.
- 4Proceeds from the new notes are intended to fund a portion of the Alltel Corporation acquisition.
- 5Funds may be used for general corporate purposes if the Alltel acquisition is not completed.
- 6The notes issued are joint and several obligations of Cellco and Verizon Wireless Capital LLC.
- 7The Notes were issued under an exemption from registration under the Securities Act of 1933.