8-KOther Events

VERIZON COMMUNICATIONS INC 8-K Report, Corporate Update (Nov 25, 2008)

Filed November 25, 2008For Securities:VZ

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.

Frequently Asked Questions

Verizon Wireless repaid the outstanding borrowings under its $7.55 billion credit agreement on November 13, 2008, ahead of its maturity date of June 4, 2009. This action demonstrates effective debt management and provides financial flexibility.

Verizon Wireless issued $1.25 billion in 7.375% notes due 2013 and $2.25 billion in 8.500% notes due 2018, totaling $3.5 billion. These notes are the joint and several obligations of Cellco Partnership and its subsidiary Verizon Wireless Capital LLC.

The net proceeds from the sale of the new notes are intended to finance a portion of the cost for the acquisition of Alltel Corporation, as well as related debt refinancing costs and expenses. If the Alltel acquisition is not consummated, the proceeds will be used for general corporate purposes.

The notes were not registered under the Securities Act of 1933 because they were offered and sold pursuant to an exemption from registration requirements. They may only be offered or sold in the United States if they are registered or if an applicable exemption applies.