The airwaves were behind them with talk of Verizon Communications Inc.’s new jumbo bond deal.
Orders for Verizon’s VZ,
up to 9-part bond financing already exceeded $ 100 billion at one point, according to an investor overseeing the deal, so much so that it sucked oxygen out of other parts of U.S. debt markets.
“There is too much agreement in the contract. There are no market issues, so the whole world is monitoring this, ”said Sal Naro, portfolio manager at Lazard Asset Management.
Bankers are expected to eventually deal with the deal at around $ 25 billion, while final prices will depend on investor demand. That would be about half of the largest loan of the likes of Verizon, $ 48.9 billion in financing, which also holds the record for the largest U.S. investment-grade corporate bond ever sold.
Here is a card from Dealogic showing the largest U.S.-rated bond deals sold to date (in billions):
The largest investment bond rate deals in the US
Dealogic
Corporate bonds are priced at a spread, or prime price, above the Treasury risk-free level, which helps compensate investors for the potential additional risk.
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yields have risen this year, particularly in the last few weeks, putting pressure on quotas in the high – growth and technology sectors, but also increasing borrowing costs for large corporations.
While on Thursday, 10-year benchmark yields were back below 1.5%, after the European Central Bank promised an increase in asset purchases to help the eurozone’s economic recovery from the pandemic.
The yield in the U.S. ICE BofA Corporate Index was close to 2.23% at the last survey, down from a drop as low as 1.79% in early January.
Verizon funding comes on the heels of spending $ 52.9 billion on its “C-Band” spectrum effort, senior CreditSights analyst Davis Herbert, who looks like the company is going “for its ‘win’ as they look to “take more into their leadership position” In the next “G” of the wireless era.
“Verizon said it will use the substantial C-Band spectrum to accelerate its growth image this year and beyond,” Herbert wrote in a note Thursday.
C-Band is a “mid-band” 5G frequency that provides customers with faster speeds and good transmission speeds. Verizon said Wednesday it expects to reach another 100 million customers over the next 12 months, as a result of its C-Band expansion, and eventually reach more than 250 million customers.
The pandemic has revealed huge holes across the U.S. in the lack of fast and affordable internet, a service that is increasingly essential as everyday life in the digital age.
Read: Why remote, school-based work in rural America requires a Biden infrastructure plan