Oops, Verizon Did It Again: Corporate Bond Edition

By Fil Zucchi  MAR 10, 2014 1:37 PM

From the Buzz & Banter: Verizon should see strong demand for its latest bond offering.

 


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After issuing more than $45 billion of bonds in a single day back in September to fund the purchase of Vodafone's (NASDAQ:VOD) stake in Verizon Wireless, Verizon (NYSE:VZ) is at it again. It's currently shopping $8.1 billion in bonds of various maturities to retire 2016 and 2017 notes. 

Big deal, you say? Eh -- yes and no.

For one thing, it looks like the refi will shave off 100 to 200 bps' worth of interest expense. At the midpoint, that's $120 million per year in found money. 

But secondly, VZ's announcement of a $4 billion stock buyback late Friday evening and today's bond sales don't look like pure coincidence, showing once again the symbiotic relationship between corporate bond sales and stock buybacks.

Will this bond issue be well-received?

The $11 billion of 10-year 5.15% bonds sold in September at $99.67 are trading at $108.33 this morning. 

If that's any indication, the sale will go very, very well.

Twitter: @FZucchi
No positions in stocks mentioned.

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