Verizon Kicks Off Record-Breaking $49 Billion Bond Deal

Lionel Bonaventure, AFP/Getty Images

Verizon Communications (VZ) officially launched a massive bond sale Wednesday, offering $49 billion worth of debt in the largest corporate offering ever.

The telecommunications giant, which will use the proceeds to finance a $130 billion acquisition of its wireless unit, is selling a mix of 3-year, 5-year, 7-year, 10-year and 20-year maturities. The deal will eclipse a debt sale by Apple (AAPL), the former record holder who sold $17 billion in bonds earlier this year.

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."

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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 multicurrency bonds it needs to help pay Vodafone (VOD) for its 45 percent stake in Verizon Wireless. The deal was upsized from its original planned size.

The Verizon bond will partly refinance a $61 billion one-year bridge loan it has taken out to pay for the debt-funding portion of the acquisition. Of the $49 billion in bond financing, its plan was to raise $5-10 billion in the euro and sterling market.

The rest of the $61 billion bridge will be replaced with about $12 billion of three and five year term loans.

The deal is so large and complex, that underwriters have decided to take two days rather than the usual one to announce and then price the deal.

-Reuters contributed to this article.

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