VERIZON COMMUNICATIONS
Verizon Announces Expiration and Final Results of Exchange Offers
NEW YORK, Aug. 20, 2014 -- Verizon Communications Inc. ("Verizon")
(NYSE, NASDAQ: VZ; LSE: VZC) today announced the expiration and final results
of its previously announced eleven separate private offers to exchange (the
"Exchange Offers") specified series of debt securities issued by Verizon and by
Alltel Corporation (an indirect wholly owned subsidiary of Verizon)
(collectively, the "Old Notes") for new debt securities to be issued by Verizon
(the "New Notes") in accordance with the terms of the Exchange Offers.
The Exchange Offers consist of the following:
(a) (i) an offer to exchange the 2.500% notes due 2016 of Verizon; and
(ii) an offer to exchange the 3.650% notes due 2018 of Verizon,
in each case, for new 2.625% notes due 2020 of Verizon (the "New Notes due
2020"), provided that the principal amount of New Notes due 2020 to be issued
in such Exchange Offers on an aggregate basis shall not exceed $3,300,000,000
(the "2020 Maximum Exchange Amount") (collectively, the "2020 Exchange
Offers");
(b) (i) an offer to exchange the 7.350% notes due 2039 of Verizon;
(ii) an offer to exchange the 7.875% debentures due 2032 of Alltel
Corporation;
(iii) an offer to exchange the 7.750% notes due 2032 of Verizon;
(iv) an offer to exchange the 7.750% notes due 2030 of Verizon;
(v) an offer to exchange the 6.800% debentures due 2029 of Alltel
Corporation; and
(vi) an offer to exchange the 6.400% notes due 2033 of Verizon,
in each case, for new 4.862% notes due 2046 of Verizon (the "New Notes due
2046"), provided that the principal amount of New Notes due 2046 to be issued
in such Exchange Offers on an aggregate basis shall not exceed $4,500,000,000
(the "2046 Maximum Exchange Amount") (collectively, the "2046 Exchange
Offers"); and
(c) (i) an offer to exchange the 6.550% notes due 2043 of Verizon;
(ii) an offer to exchange the 6.900% notes due 2038 of Verizon; and
(iii) an offer to exchange the 6.400% notes due 2038 of Verizon,
in each case, for new 5.012% notes due 2054 of Verizon (the "New Notes due
2054"), provided that the principal amount of New Notes due 2054 to be issued
in such Exchange Offers on an aggregate basis shall not exceed $5,500,000,000
(the "2054 Maximum Exchange Amount") (collectively, the "2054 Exchange
Offers").
The Exchange Offers were conducted by Verizon upon the terms and subject to the
conditions set forth in a confidential offering memorandum, dated July 23,
2014, as amended by the press release issued by Verizon on August 6, 2014 (the
"Offering Memorandum").
Based on information provided by Global Bondholder Services Corporation, the
exchange agent and information agent for the Exchange Offers, the tables below
provide the aggregate principal amount of each series of Old Notes validly
tendered and not validly withdrawn at or prior to the Expiration Date for the
Exchange Offers (11:59 p.m. (New York City time) on August 19, 2014) and the
aggregate principal amount of each series of Old Notes that Verizon expects to
accept pursuant to the Exchange Offers.
Old Notes included in the 2020 Exchange Offers:
Principal Principal Amount
CUSIP Title of Acceptance Principal Amount Expected to be
Number Security Priority Amount Tendered by Accepted Pursuant
Level Outstanding the Expiration to the Exchange
Date Offer
2.500%
92343VBN3 notes 1 $4,250,000,000 $1,067,665,000 $1,067,665,000
due 2016(1)
3.650%
92343VBP8 notes 2 $4,750,000,000 $2,051,930,000 $2,051,930,000
due 2018(1)
Old Notes included in the 2046 Exchange Offers:
Principal
Principal Amount
CUSIP/ISIN Title of Acceptance Principal Amount Expected to be
Number Security Priority Amount Tendered by Accepted
Level Outstanding the Expiration Pursuant to
Date the Exchange
Offer
7.350%
92343VAU8 notes 1 $1,000,000,000 $519,670,000 $519,670,000
due 2039(1)
7.875%
020039DC4 debentures 2 $700,000,000 $248,199,000 $248,199,000
due 2032(2)
7.750%
92344GAS5 notes 3 $400,000,000 $149,216,000 $149,215,000
due 2032(1)
92344GAM8 7.750%
92344GAC0 notes
U92207AC0/ due 2030(1) 4 $2,000,000,000 $793,804,000 $793,804,000
USU92207AC07
6.800%
020039AJ2 debentures 5 $300,000,000 $65,379,000 $65,379,000
due 2029(2)
6.400%
92343VBS2 notes due 6 $6,000,000,000 $3,619,495,000 $1,644,545,000
2033(1)
Old Notes included in the 2054 Exchange Offers:
Principal Principal Amount
CUSIP Title of Acceptance Principal Amount Expected to be
Number Security Priority Amount Tendered by Accepted Pursuant
Level Outstanding the Expiration to the Exchange
Date Offer
6.550%
92343VBT0 notes 1 $15,000,000,000 $9,816,003,000 $4,330,394,000
due 2043(1)
6.900%
92343VAP9 notes 2 $1,250,000,000 $641,770,000 $0
due 2038(1)
6.400%
92343VAK0 notes 3 $1,750,000,000 $615,001,000 $0
due 2038(1)
_____________
(1) Issued by Verizon.
(2) Issued by Alltel Corporation.
Based on the aggregate principal amount of Old Notes validly tendered (and not
validly withdrawn) in the Exchange Offers and in accordance with the terms of
the Exchange Offers, Verizon expects to accept:
(a) (i) all of the tendered 2.500% notes due 2016; and
(ii) instead of accepting tendered 3.650% notes due 2018 on a prorated
basis, Verizon expects to accept additional tendered 3.650% notes due
2018 for exchange pursuant to Verizon's right under the federal
securities laws to accept up to an additional 2% of the outstanding
3.650% notes due 2018 without extending the Exchange Offer and
accordingly expects to accept all tendered 3.650% notes due 2018;
(b) (i) all of the tendered 7.350% notes due 2039;
(ii) all of the tendered 7.875% debentures due 2032;
(iii) all of the tendered 7.750% notes due 2032;
(iv) all of the tendered 7.750% notes due 2030;
(v) all of the tendered 6.800% debentures due 2029; and
after giving effect to proration and rounding, $1,644,545,000
(vi) aggregate principal amount of the tendered 6.400% notes due 2033,
with a proration factor for such series of Old Notes equal to
approximately 45.45%; and
(c) (i) after giving effect to proration and rounding, $4,330,394,000
aggregate principal amount of the tendered 6.550% notes due 2043,
with a proration factor for such series of Old Notes equal to
approximately 44.13%;
(ii) none of the tendered 6.900% notes due 2038; and
(iii) none of the tendered 6.400% notes due 2038.
The settlement date for the Exchange Offers is expected to be August 21, 2014.
Verizon expects that it will issue $3,304,145,000 aggregate principal amount of
New Notes due 2020, $4,500,038,000 aggregate principal amount of New Notes due
2046 and $5,500,001,000 aggregate principal amount of New Notes due 2054, in
satisfaction of the exchange offer consideration on such tendered Old Notes
(not including accrued and unpaid interest on the Old Notes, which will be
payable by Verizon in addition to the applicable exchange offer consideration).
Verizon will not receive any cash proceeds from the Exchange Offers.
Consummation of the Exchange Offers is subject to the satisfaction of the
Accounting Treatment Condition (as described in the Offering Memorandum). As
previously announced, the Yield Condition (as described in the Offering
Memorandum) has been satisfied. Verizon today announced that certain customary
conditions to the Exchange Offers, including the absence of certain adverse
legal and market developments, have been satisfied. No Exchange Offer is
conditioned upon any minimum amount of Old Notes being tendered or the
consummation of any other Exchange Offer, and, subject to applicable law, each
Exchange Offer may be amended, extended or terminated individually.
The Exchange Offers were extended only (1) to holders of Old Notes that are
"Qualified Institutional Buyers" as defined in Rule 144A under the U.S.
Securities Act of 1933, as amended (the "U.S. Securities Act"), in a private
transaction in reliance upon the exemption from the registration requirements
of the U.S. Securities Act provided by Section 4(a)(2) thereof and (2) outside
the United States, to holders of Old Notes other than "U.S. persons" (as
defined in Rule 902 under Regulation S of the U.S. Securities Act) and who are
not acquiring New Notes for the account or benefit of a U.S. person, in
offshore transactions in compliance with Regulation S under the U.S. Securities
Act, and who are "Non-U.S. qualified offerees" (as defined in the Offering
Memorandum) (each of the foregoing, an "Eligible Holder"), and in each case who
have certified in an eligibility letter certain matters to Verizon, including
the above status. Only Eligible Holders who had completed and returned an
eligibility letter were authorized to receive the Offering Memorandum and to
participate in the Exchange Offers.
If and when issued, the New Notes will not be registered under the U.S.
Securities Act or any state securities laws. Therefore, the New Notes may not
be offered or sold in the United States absent registration or an applicable
exemption from the registration requirements of the U.S. Securities Act and any
applicable state securities laws. Verizon will enter into a registration rights
agreement with respect to the New Notes.
The lead dealer managers for the Exchange Offers were Citigroup Global Markets
Inc., J.P. Morgan Securities LLC and UBS Securities LLC. The co-dealer managers
for the Exchange Offers, including four minority-, veteran- and women-owned
firms, were Deutsche Bank Securities Inc., Mizuho Securities USA Inc., RBC
Capital Markets, LLC, Barclays Capital Inc., Lloyds Securities Inc., Santander
Investment Securities Inc., MFR Securities, Inc., Mischler Financial Group,
Inc., Samuel A. Ramirez & Company, Inc., PNC Capital Markets LLC, SMBC Nikko
Securities America, Inc. and The Williams Capital Group, L.P.
This press release is not an offer to sell or a solicitation of an offer to buy
any security. The Exchange Offers are being made solely by the Offering
Memorandum and only to such persons and in such jurisdictions as is permitted
under applicable law.
This communication has not been approved by an authorized person for the
purposes of Section 21 of the Financial Services and Markets Act 2000, as
amended (the "FSMA"). Accordingly, this communication is not being directed at
persons within the United Kingdom save in circumstances where section 21(1) of
the FSMA does not apply.
In particular, this communication is only addressed to and directed at: (A) in
any Member State of the European Economic Area that has implemented the
Prospectus Directive (as defined below), qualified investors in that Member
State within the meaning of the Prospectus Directive and (B) (i) persons that
are outside the United Kingdom or (ii) persons in the United Kingdom falling
within the definition of investment professionals (as defined in Article 19(5)
of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005
(the "Financial Promotion Order")) or within Article 43 of the Financial
Promotion Order, or to other persons to whom it may otherwise lawfully be
communicated by virtue of an exemption to Section 21(1) of the FSMA or
otherwise in circumstance where it does not apply (such persons together being
"relevant persons"). The New Notes are only available to, and any invitation,
offer or agreement to subscribe, purchase or otherwise acquire such New Notes
will be engaged in only with, relevant persons. Any person who is not a
relevant person should not act or rely on the Offering Memorandum or any of its
contents. For purposes of the foregoing, the "Prospectus Directive" means the
Prospectus Directive 2003/71/EC, as amended, including pursuant to Directive
2010/73/EU.
Cautionary Statement Regarding Forward-Looking Statements
In this communication we have made forward-looking statements. These
statements are based on our estimates and assumptions and are subject to risks
and uncertainties. Forward-looking statements include the information
concerning our possible or assumed future results of operations.
Forward-looking statements also include those preceded or followed by the words
"anticipates," "believes," "estimates," "hopes" or similar expressions. For
those statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. The following important factors, along with those discussed
in our filings with the Securities and Exchange Commission (the "SEC"), could
affect future results and could cause those results to differ materially from
those expressed in the forward-looking statements: the ability to realize the
expected benefits of our transaction with Vodafone in the timeframe expected or
at all; an adverse change in the ratings afforded our debt securities by
nationally accredited ratings organizations or adverse conditions in the credit
markets affecting the cost, including interest rates, and/or availability of
further financing; significantly increased levels of indebtedness as a result
of the Vodafone transaction; changes in tax laws or treaties, or in their
interpretation; adverse conditions in the U.S. and international economies;
material adverse changes in labor matters, including labor negotiations, and
any resulting financial and/or operational impact; material changes in
technology or technology substitution; disruption of our key suppliers'
provisioning of products or services; changes in the regulatory environment in
which we operate, including any increase in restrictions on our ability to
operate our networks; breaches of network or information technology security,
natural disasters, terrorist attacks or acts of war or significant litigation
and any resulting financial impact not covered by insurance; the effects of
competition in the markets in which we operate; changes in accounting
assumptions that regulatory agencies, including the SEC, may require or that
result from changes in the accounting rules or their application, which could
result in an impact on earnings; significant increases in benefit plan costs or
lower investment returns on plan assets; and the inability to implement our
business strategies.
SOURCE Verizon Communications Inc.
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