Verizon Announces Early Tender Results of Exchange Offers and an Increase of
the Maximum Exchange Amount under the 2020 Exchange Offers
NEW YORK, Aug. 6, 2014 -- Verizon Communications Inc. ("Verizon")
(NYSE, NASDAQ: VZ; LSE: VZC) today announced the early tender 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. Verizon also announced
that it increased the maximum aggregate principal amount of New Notes that may
be issued pursuant to certain 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
(previously $2,000,000,000) (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"). Each of the 2020 Maximum Exchange Amount, the 2046 Maximum Exchange
Amount and the 2054 Maximum Exchange Amount is referred to herein as a "Maximum
Exchange Amount."
As described above, Verizon has increased the 2020 Maximum Exchange Amount from
$2,000,000,000 to $3,300,000,000. The 2046 Maximum Exchange Amount will remain
unchanged at $4,500,000,000, and the 2054 Maximum Exchange Amount will remain
unchanged at $5,500,000,000. All other terms of the Exchange Offers remain
unchanged.
The Exchange Offers are being conducted by Verizon upon the terms and subject
to the conditions set forth in a confidential offering memorandum, dated July
23, 2014 (the "Offering Memorandum").
Based on information provided by Global Bondholder Services Corporation, the
exchange agent and information agent for the Exchange Offers, the following
aggregate principal amount of each series of Old Notes was validly tendered and
not validly withdrawn at or prior to the Early Participation Date (as defined
below) pursuant to the Exchange Offers:
Old Notes included in the 2020 Exchange Offers:
CUSIP Acceptance Principal Principal Amount
Number Title of Security Priority Amount Tendered by the Early
Level Outstanding Participation Date
92343VBN3 2.500% notes due 2016(1) 1 $4,250,000,000 $1,048,582,000
92343VBP8 3.650% notes due 2018(1) 2 $4,750,000,000 $2,034,385,000
Old Notes included in the 2046 Exchange Offers:
CUSIP/ISIN Acceptance Principal Principal Amount
Number Title of Security Priority Amount Tendered by the Early
Level Outstanding Participation Date
92343VAU8 7.350% notes due 2039(1) 1 $1,000,000,000 $519,670,000
020039DC4 7.875% debentures due 2032(2) 2 $700,000,000 $246,897,000
92344GAS5 7.750% notes due 2032(1) 3 $400,000,000 $149,216,000
92344GAM8
92344GAC0
U92207AC0/ 7.750% notes due 2030(1) 4 $2,000,000,000 $793,788,000
USU92207AC07
020039AJ2 6.800% debentures due 2029(2) 5 $300,000,000 $65,379,000
92343VBS2 6.400% notes due 2033(1) 6 $6,000,000,000 $3,616,750,000
Old Notes included in the 2054 Exchange Offers:
CUSIP Acceptance Principal Principal Amount
Number Title of Security Priority Amount Tendered by the Early
Level Outstanding Participation Date
92343VBT0 6.550% notes due 2043(1) 1 $15,000,000,000 $9,813,058,000
92343VAP9 6.900% notes due 2038(1) 2 $1,250,000,000 $641,220,000
92343VAK0 6.400% notes due 2038(1) 3 $1,750,000,000 $615,001,000
(1) Issued by Verizon.
(2) Issued by Alltel Corporation.
As set forth above, since tenders of the 6.550% notes due 2043 would otherwise
result in an issuance of New Notes due 2054 in an aggregate principal amount
that exceeds the 2054 Maximum Exchange Amount, Verizon will promptly return the
6.900% notes due 2038 and the 6.400% notes due 2038 tendered for exchange and
will not accept further tenders of these two series of Old Notes.
Subject to the terms and conditions of the Exchange Offers (including the
increase of the 2020 Maximum Exchange Amount), we will accept for exchange the
Old Notes of any series validly tendered in the 2020 Exchange Offers, the 2046
Exchange Offers and the 2054 Exchange Offers, respectively, in accordance with
the applicable "Acceptance Priority Level" (in numerical priority order) for
such series as set forth in the corresponding table for such group of Exchange
Offers above (each, an "Acceptance Priority Level"), with Acceptance Priority
Level 1 being the highest priority level. All Old Notes validly tendered in the
Exchange Offers subject to a particular Maximum Exchange Amount that have a
higher Acceptance Priority Level will be accepted for exchange before any
validly tendered Old Notes in the Exchange Offers subject to the same Maximum
Exchange Amount that have a lower Acceptance Priority Level are accepted. If
the remaining available portion of the applicable Maximum Exchange Amount is
not adequate to permit the acceptance for exchange of all of the validly
tendered Old Notes having a particular Acceptance Priority Level, we will
allocate such available Maximum Exchange Amount among the aggregate principal
amount of such validly tendered Old Notes having such Acceptance Priority Level
on a pro rata basis, and any validly tendered Old Notes having a lower
Acceptance Priority Level will not be accepted for exchange.
The withdrawal date (5:00 p.m. (New York City time) on August 5, 2014) for the
Exchange Offers has now passed. In accordance with the terms of the Exchange
Offers, tendered Old Notes may no longer be withdrawn, except in certain
limited circumstances where additional withdrawal rights are required by law.
The Exchange Offers will expire at 11:59 p.m. (New York City time) on August
19, 2014, unless extended by Verizon (the "Expiration Date").
Eligible Holders (as defined below) that validly tendered and did not validly
withdraw their Old Notes at or prior to 5:00 p.m. (New York City time) on
August 5, 2014 (the "Early Participation Date") will be eligible to receive the
applicable Total Exchange Price (the "Total Exchange Price"), which includes
the applicable early participation payment (the "Early Participation Payment"),
each as described in the Offering Memorandum. Eligible Holders who validly
tender their Old Notes after the Early Participation Date, but at or prior to
the Expiration Date, will be eligible to receive the applicable Exchange Price
(the "Exchange Price"), which is the applicable Total Exchange Price minus the
applicable Early Participation Payment. For each series of Old Notes, the Total
Exchange Price and Exchange Price will be paid in a principal amount of
applicable New Notes equal to such Total Exchange Price or Exchange Price,
respectively.
The settlement date for the Exchange Offers will be promptly following the
Expiration Date and is expected to be August 21, 2014, which is the second
business day after the Expiration Date. Verizon will not receive any cash
proceeds from the Exchange Offers.
Consummation of the Exchange Offers is subject to the satisfaction of certain
conditions, including (1) certain customary conditions, including the absence
of certain adverse legal and market developments and (2) 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. 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 are being 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 have completed and returned an
eligibility letter are authorized to receive the Offering Memorandum and to
participate in the Exchange Offers. Holders of Old Notes who desire a copy of
the eligibility letter may contact Global Bondholder Services Corporation
toll-free at (866) 470-3800 or at (212) 430-3774 (banks and brokerage firms).
Eligible Holders are advised to check with any bank, securities broker or other
intermediary through which they hold Old Notes as to when such intermediary
needs to receive instructions from an Eligible Holder in order for that
Eligible Holder to be able to participate in, or (in the circumstances in which
revocation is permitted) revoke their instruction to participate in, the
Exchange Offers before the deadlines specified herein and in the Offering
Memorandum. The deadlines set by each clearing system for the submission and
withdrawal of exchange instructions will also be earlier than the relevant
deadlines specified herein and in the Offering Memorandum.
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.
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.
CONTACT: Bob Varettoni, 908-559-6388, robert.a.varettoni@verizon.com
SOURCE Verizon Communications Inc.