Tenet Healthcare Corp (THC), Activision Blizzard, Inc. (ATVI): Verizon Communications Inc. (VZ) + Verizon Wireless = Record Bond Deal

After a few months of sputtering, tepid corporate bond issuance, the U.S. bond market got very busy last week with more than $90 billion in new issues. One company by itself was responsible for more than half the total.

About five months ago, Apple set a new record for corporate bond issues with a six-tranche, $17 billion deal. Verizon Communications Inc. (NYSE:VZ) crushed that last week with a $49 billion deal to help pay for its $130 billion acquisition of Vodafone‘s stake in Verizon Wireless. To help put that in perspective, had this been the only deal last week, it would have been the second-biggest week for corporate issues so far this year.

Verizon Communications Inc. (NYSE:VZ)

Here’s how the deal broke down along with the public issue price and last traded price from Friday for each slice of the debt. Buyers at the offering price made a tidy profit over a few days.

Amount
(in Millions)

Matures

Coupon Rate

Issue Price
(% of Par Value)

Last Traded
(% of Par Value)

$2,250

September 2016

Floating, 3-month LIBOR + 1.53%

100.000%

102.63%

$4,250

September 2016

2.50%

99.923%

103.02%

$1,750

September 2018

Floating, 3-month LIBOR + 1.75%

100.000%

104.22%

$4,750

September 2018

3.65%

99.996%

103.99%

$4,000

September 2020

4.50%

99.870%

104.78%

$11,000

September 2023

5.15%

99.676%

106.23%

$6,000

September 2033

6.40%

99.900%

107.92%

$15,000

September 2043

6.55%

99.883%

108.24%

Source: Verizon SEC filing and FINRA.org.

Servicing the new debt will run Verizon Communications Inc. (NYSE:VZ) a little under $2.5 billion per year. After all that, the borrowing probably isn’t over. The Use of Proceeds statement in the SEC filing said the rest of the $130 billion would come from “other indebtedness and available cash.” There was no mention of a share offering, but I wouldn’t be surprised to see that added to the mix, particularly if borrowing rates head north.

Verizon Communications Inc. (NYSE:VZ) wasn’t the only issuer last week. Here are snapshots of some of the other deals.

Tenet Healthcare Corp (NYSE:THC) wrote a prescription in the junk market for $4.6 billion split between 6% senior secured notes maturing in 2020 and 8.125% senior unsecured notes maturing in 2022. The money is being used to finance Tenet Healthcare Corp (NYSE:THC)’s acquisition of Vanguard Health Systems.

Activision Blizzard, Inc. (NASDAQ:ATVI) tried its hand at the bond game by issuing eight- and 10-year notes totaling $2.25 billion. Coupon rates were 5.625% and 6.125%, respectively. The money will go toward buying enough Activision shares from Vivendi to make Activision Blizzard, Inc. (NASDAQ:ATVI) an independent company.

Energy Transfer Partners LP (NYSE:ETP) piped in $1.5 billion by selling seven-, 10.5-, and 30-year notes. The money will be used “to repay $455 million of borrowings outstanding under the term loan of Panhandle’s wholly owned subsidiary, Trunkline LNG Holdings, LLC, to repay borrowings outstanding under Energy Transfer Partners LP (NYSE:ETP)’s revolving credit facility and for general partnership purposes.”

Oneok Partners LP (NYSE:OKS) sold a $1.25 billion, three-part deal of five-, 10-, and 30-year notes. The money is being used to pay of $1.2 billion of commercial paper.