2nd UPDATE: Vodafone Group PLC Preparing $1.1 Billion 2-Part Debt Offering

Vodafone Group PLC (VOD, VOD.LN) said it would sell $1.1 billion of new debt Wednesday.

The deal was increased from an originally planned $1 billion.

The issue will include five- and 10-year senior unsecured note tranches and is expected to be priced later in the session via bookrunners Barclays, BNP Paribas, Morgan Stanley and Mizuho.

The $600 million, five-year tranche was launched with a risk premium of 85 basis points over Treasurys while the $500 million, 10-year tranche was launched at 100 basis points.

Both pieces were launched at the wide end of preliminary price levels. Preliminary price guidance had suggested a risk premium in the range of 80 to 85 basis points over Treasurys for the five-year piece and a range of 95 to 100 basis points for the 10-year tranche.

Vodafone 5.00% notes due 2013 recently traded at 97 basis points over Treasurys, according to MarketAxess.

Vodafone's debt offering will include a make-whole call provision, meaning that the borrower can pay off the debt early. But because the cost to invoke this kind of covenant can be significant, issuers rarely use the option.

Proceeds will be used for general corporate purposes, which could include the repayment of outstanding debt securities.

The deal has been rated Baa1 by Moody's Investors Service and A- by Standard & Poor's.

-By Kellie Geressy-Nilsen, Dow Jones Newswires; 212 416-2225; kellie.geressy@dowjones.com

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