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Verizon Communications : Launches $25 Billion Bond Sale to Pay for 5G Spectrum

03/11/2021 | 04:20pm EDT

By Nina Trentmann

Verizon Communications Inc. is raising $25 billion in new debt to help the cellphone carrier settle a bill for spectrum licenses coming due this month.

The telecommunications company in February won more than half of the wireless airwaves offered in a U.S. government auction and pledged $45.5 billion for them, plus roughly $8 billion in additional clearing payments to help existing license users move to other bands. The new spectrum rights could help Verizon expand the reach and bandwidth of its fifth-generation wireless offering.

Verizon paid a first installment of $8.2 billion to the Federal Communications Commission on Wednesday, and will use the proceeds of the latest bond sale to pay the roughly $36.4 billion owed to the FCC by March 24, Chief Financial Officer Matthew Ellis said.

Verizon, the country's largest carrier in terms of subscribers, theoretically has enough funds to pay the FCC even without the bond sale. The company in late February agreed to a $25 billion term-loan facility with a consortium of banks that it can draw down on if needed, Mr. Ellis said. Verizon also has some money left from a $12 billion bond sale in November and could use those funds for the second payment to the FCC, Mr. Ellis said.

The company held $22.2 billion in cash on the balance sheet at the end of December, plus an undrawn credit facility of $9.4 billion, according to ratings company Fitch Ratings.

On top of the nearly $54 billion for 5G licenses and related items, Verizon told investors Wednesday that it plans a total of $10 billion in capital expenditures for expanding its midband, or C-band, range over the next three years, a swath of airwaves that previously were restricted to satellite communications.


Drew FitzGerald contributed to this article

Write to Nina Trentmann at nina.trentmann@wsj.com

(END) Dow Jones Newswires

03-11-21 1620ET

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Analyst Recommendations on VERIZON COMMUNICATIONS
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Financials (USD)
Sales 2021 135 B - -
Net income 2021 21 815 M - -
Net Debt 2021 144 B - -
P/E ratio 2021 10,4x
Yield 2021 4,66%
Capitalization 225 B 225 B -
EV / Sales 2021 2,73x
EV / Sales 2022 2,68x
Nbr of Employees 132 200
Free-Float 96,5%
Duration : Period :
Verizon Communications Technical Analysis Chart | VZ | US92343V1044 | MarketScreener
Technical analysis trends VERIZON COMMUNICATIONS
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 28
Last Close Price 54,42 $
Average target price 60,29 $
Spread / Average Target 10,8%
EPS Revisions
Managers and Directors
Hans Erik Vestberg Chairman & Chief Executive Officer
Matthew D. Ellis Chief Financial Officer & Executive Vice President
Kyle J. Malady Chief Technology Officer & Executive VP
Shankar Arumugavelu Global Chief Information Officer
Craig Silliman Chief Administrative & Legal Officer, Executive VP
Sector and Competitors