Verizon’s landmark bond and buyout explained

Author: Zoe Thomas | Published: 20 Sep 2013
  • The $49 billion bond offering from Verizon Communications was the largest corporate bond sale in history;
  • The issuance is intended to finance the buy-out of Vodafone Group’s 45% stake in its wireless operations, Verizon Wireless;
  • Deal counsel believe the deal could prompt other companies to be more aggressive when evaluating merger opportunities and related financings;
  • The Federal Reserve’s September 18 announcement that it would maintain its current stimulus levels, as well as over-subscription for the record offering, has prompted speculation that a corporate bond boom could follow;
  • Industry insiders have also noted a number of unusual features in Verizon’s buyout, including the size of the break-up fee and the rare use of a UK scheme of arrangement to buy an asset.

Last week’s $49 billion...