TRLPC: Verizon to refinance $11.3bn in credit facilities

NEW YORK, July 18 Fri Jul 18, 2014 5:08pm EDT

NEW YORK, July 18 (Reuters) - Verizon Communications Inc is in the market with $11.3 billion in loans that will cut borrowing costs on debt backing the $130 billion takeover of Verizon Wireless from Vodafone Group Plc, the third-biggest acquisition in corporate history, sources told Thomson Reuters LPC.

JP Morgan, Citigroup, Bank of America Merrill Lynch, Barclays, Morgan Stanley and Wells Fargo are leading the refinancing.

Verizon declined to comment.

BAML, JP Morgan, Citi and Morgan Stanley also declined to comment. Barclays and Wells Fargo could not be reached by press time.

The refinancing aims to increase an existing revolver to $8 billion from $6.2 billion, extend the maturity date from August 12, 2017, to July 31, 2018, and lower pricing. The new revolver also replaces an existing $2 billion, 364-day revolving credit.

The $8 billion, four-year revolver will pay 10bp undrawn for current ratings of Baa1/BBB+. If drawn, the revolver pays 162.5bp.

In addition, the company is seeking to amend its existing $3.3 billion, five-year term loan. Pricing on the term loan opens at LIB+125.

In September 2013, Verizon announced its plans to acquire the 45 percent stake in Verizon Wireless that it did not already own from Vodafone. The acquisition was backed with a $61 billion bridge loan led by JP Morgan, Morgan Stanley, BAML and Barclays. JP Morgan and Morgan Stanley were global coordinators of the financing.

The $61 billion bridge loan was replaced with $49 billion of bonds and $12 billion in three- and five-year term loans. Separately, the financing included a $2 billon, 364-day revolver.

Pricing on the $6 billion, three-year term loan and $6 billion, five-year term loan is LIB+137.5 and LIB+150, respectively. The $2 billion, 364-day revolver pays 10bp on undrawn amounts. Drawn pricing on the facility is LIB+125.

In February, the company drew $6.6 billion in term loans evenly split between the three-year and five-year facilities.

The $3.3 billion in term debt currently being refinanced is outstanding under the five-year facility.

Also in September 2013, the company refinanced a $6.2 billion four-year revolver. The revolver pays 10bp undrawn.

On January 28, shareholders of both Vodafone and Verizon approved Verizon's $130 billion takeover of their Verizon Wireless venture. (Editing By Jon Methven)

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