Verizon bonds hit record high of $49 billion

Getty Images

Verizon's new US$49 billion bonds soared in secondary trading on Thursday, meaning tens of millions in potential profits for investors who got in on the largest corporate bond issue ever.

The telecoms giant awed the bond market with the offering on Wednesday, and by midday Thursday the new issue had rocketed up as much as seven-plus points in dollar price.

The eight different maturities of the massive deal were all trading at least 45 basis points (bp) tighter than Wednesday's pricing, with some tightening as much as 80bp.

The US$15 billion 30-year tranche, where investors get the biggest bang for their buck because of the long maturity, was trading at US$107.467, giving it a spread of 219bp over Treasury bonds versus a 265bp spread at pricing.

(Read more: Verizon prices record-breaking $49 billion bond deal)

The $49 billion raised, along with about $12 billion of term loans, will completely refinance the $61 billion one-year bridge loan put in place last week to cover the debt portion of Verizon's acquisition of Vodafone's VOD.L 45% holding in Verizon Wireless.

"The issuer had accepted that this was what it would take if it wanted to get its potentially much more expensive bridge loan taken out in one hit," the banker said.

"In order to flush out so much money, it needed to be cheap to pretty much everything else in the investment-grade market."

(Read more: Some Verizon Investors OK With Paying Premium for Vodafone Stake)

Around midday, these were the levels being quoted for the eight tranches of the deal:

VZ6.55% 2043s – T 219bp $107.467
VZ6.40% 2033s – T 196bp $107.294
VZ5.15% 2023s – T 179bp $103.823
VZ4.50% 2020s – T 148bp $103.811
VZ3.65% 2018s – T 115bp $103.801
VZ2.50% 2016s – T 85bp $102.273
VZFRN 2018s – $103.57
VZFRN 2016s - $102.51

(Read more: Why $130 billion Verizon-Vodafone deal makes sense)

-- By Reuters

Contact U.S. News


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    To learn more about how we use your information,
    please read our Privacy Policy.

Don't Miss

  • The Glass Ceiling

    Full-time working women still only earn about 77% of what men do in the same fields. A lawsuit in Silicon Valley is bringing renewed focus to that statistic. Vanity Fair Contributing Editor Bethany McLean on the equality fight for women's pay and promotion.

  • Man takes off work clothes on beach

    With Ruth Porat leaving Wall Street for Silicon Valley, Turney Duff takes a look at other ex-Wall Street friends and where they are now.

  • A group of scientists believe they've cracked the reason behind a big mystery: Why are beards so popular?

U.S. Video