Verizon Announces Exchange Offers

Verizon Announces Exchange Offers for Certain Outstanding Notes From Eligible Holders NEW YORK, Feb. 11, 2015 -- Verizon Communications Inc. ("Verizon") (NYSE,NASDAQ: VZ; LSE: VZC) today announced the commencement of seven separateprivate offers to exchange (the "Exchange Offers") specified series of debtsecurities issued by Verizon and by GTE Corporation (a subsidiary of Verizon)(collectively, the "Old Notes") for new debt securities to be issued by Verizon(the "New Notes") and, in the case of the 6.94% debentures due 2028 of GTECorporation (the "GTE Debentures"), cash in accordance with the terms of theExchange Offers. The Exchange Offers consist of the following: (a) an offer to exchange the 5.15% notes due 2023 of Verizon for new notes due 2036 of Verizon (the "New Notes due 2036"), provided that the principal amount of New Notes due 2036 to be issued in such Exchange Offer on an aggregate basis shall not exceed $3,000,000,000 (the "2036 Maximum Exchange Amount") (the "2036 Exchange Offer"); (b) (i) an offer to exchange the 6.90% notes due 2038 of Verizon; (ii) an offer to exchange the 6.40% notes due 2038 of Verizon; (iii) an offer to exchange the 6.40% notes due 2033 of Verizon; (iv) an offer to exchange the 6.25% notes due 2037 of Verizon; and (v) an offer to exchange the GTE Debentures; in each case, for new notes due 2048 of Verizon (the "New Notes due 2048") and, in the case of the GTE Debentures, cash, provided that the principal amount of New Notes due 2048 to be issued in such Exchange Offers on an aggregate basis shall not exceed $4,500,000,000 (the "2048 Maximum Exchange Amount") (collectively, the "2048 Exchange Offers"); and (c) an offer to exchange the 6.55% notes due 2043 of Verizon for new notes due 2055 of Verizon (the "New Notes due 2055"), provided that the principal amount of New Notes due 2055 to be issued in such Exchange Offer on an aggregate basis shall not exceed $5,000,000,000 (the "2055 Maximum Exchange Amount") (the "2055 Exchange Offer"). Each of the 2036 Maximum Exchange Amount, the 2048 Maximum Exchange Amount and the 2055 Maximum Exchange Amount is referred to herein as a "Maximum Exchange Amount." The Exchange Offers are being conducted by Verizon upon the terms and subjectto the conditions set forth in a confidential offering memorandum, datedFebruary 11, 2015 (the "Offering Memorandum"). The table below lists the series of Old Notes included in the 2036 Exchange Offer: Principal CUSIP Amount Number Title of Security Outstanding 92343VBR4 5.15% notes due 2023 $11,000,000,000 Bloomberg Fixed Spread Reference U.S. Reference (basis Hypothetical Total Exchange Price Treasury Security Page points) (1)(2) 2.250% due 11/15/24 FIT1 +108 $1,155.47 The table below lists the series of Old Notes included in the 2048 Exchange Offers: Principal Bloomberg CUSIP Amount Reference U.S. Reference Number Title of Security Outstanding Treasury Security Page 92343VAP9 6.90% notes due 2038(5) $1,250,000,000 3.125% due 8/15/44 FIT192343VAK0 6.40% notes due 2038(5) $1,750,000,000 3.125% due 8/15/44 FIT192343VBS2 6.40% notes due 2033(5) $4,355,455,000 3.125% due 8/15/44 FIT192343VAF1 6.25% notes due 2037(5) $750,000,000 3.125% due 8/15/44 FIT1362320BA0 6.94% debentures due 2028(6) $800,000,000 3.125% due 8/15/44 FIT1 Composition of Hypothetical Total Exchange Price Acceptance Hypothetical Total Fixed Spread Priority Exchange Price(2)(3) Cash Hypothetical New (basis points) Level Amount(4) Notes Amount(1) +178 1 $1,370.92 N/A $1,370.92 +178 2 $1,297.21 N/A $1,297.21 +153 3 $1,297.80 N/A $1,297.80 +167 4 $1,287.77 N/A $1,287.77 +132 5 $1,311.69 $100.00 $1,211.69 The table below lists the series of Old Notes included in the 2055 Exchange Offer: Principal CUSIP Amount Number Title of Security Outstanding 92343VBT0 6.55% notes due 2043 $10,669,606,000 Bloomberg Fixed Spread Reference U.S. Reference (basis Hypothetical Total Exchange Price Treasury Security Page points) (1)(2) 3.125% due 8/15/44 FIT1 +183 $1,349.33 (1) Payable in principal amount of the applicable series of New Notes per each $1,000 princ ipal amount of the specified series of Old Notes validly tendered and not validly withdrawn at or prior to the Early Participation Date (as defined below) and accepted for exchange. (2) Hypothetical Total Exchange Price (as defined below) is based on the fixed spread for the applicable series of Old Notes to the yield of the Reference U.S. Treasury Security for that series as of 11:00 a.m. (New York City time) on February 10, 2015. The information provided in the above tables is for illustrative purposes only. Verizon makes no representation with respect to the actual consideration that may be paid, and such amounts may be greater or less than those shown in the above table depending on the yield of the applicable Reference U.S. Treasury Security as of the Price Determination Date (as defined below). Eligible Holders (as defined below) who validly tender Old Notes of any particular series after the Early Participation Date, but at or prior to the Expiration Date (as defined below), will receive the Total Exchange Price for such series minus an early participation payment, which is equal to $50.00 of principal amount of the applicable series of New Notes per each $1,000 principal amount of the applicable series of Old Notes validly tendered and not validly withdrawn at or prior to the Early Participation Date and accepted for exchange (the "Early Participation Payment"). (3) Payable in principal amount of the applicable series of New Notes (and in the case of the GTE Debentures, in a combination of New Notes due 2048 and the Cash Amount (as defined below)) per each $1,000 principal amount of the specified series of Old Notes validly tendered and not validly withdrawn at or prior to the Early Participation Date and accepted for exchange. (4) Cash payment payable as a portion of the Total Exchange Price equal to $100.00 per each $1,000 principal amount of GTE Debentures validly tendered and not validly withdrawn at or prior to the Early Participation Date and accepted for exchange (the "Cash Amount"). The Cash Amount excludes accrued and unpaid interest on the GTE Debentures, which will be payable in addition to the applicable Total Exchange Price. The balance of the Total Exchange Price for the GTE Debentures is payable in principal amount of New Notes due 2048 per each $1,000 principal amount of GTE Debentures validly tendered and not validly withdrawn at or prior to the Early Participation Date and accepted for exchange. (5) Issued by Verizon. (6) Issued by GTE Corporation, a subsidiary of Verizon. The purpose of the Exchange Offers is (i) to extend the maturity of the debtobligations associated with the Old Notes during a time of favorable marketconditions, (ii) move the debt obligations associated with the GTE Debenturesfrom GTE Corporation to Verizon and (iii) more evenly distribute the amount ofprincipal due on Verizon's debt securities over time. Subject to the terms and conditions of the 2036 Exchange Offer and the 2055Exchange Offer, we will accept for exchange the Old Notes validly tendered inthe 2036 Exchange Offer and the 2055 Exchange Offer, respectively, subject tothe 2036 Maximum Exchange Amount and 2055 Maximum Exchange Amount, asapplicable. If the 2036 Maximum Exchange Amount or the 2055 Maximum ExchangeAmount is not adequate to permit the acceptance for exchange of all of thevalidly tendered and not validly withdrawn Old Notes for the 2036 ExchangeOffer or the 2055 Exchange Offer, respectively, we will allocate the applicableMaximum Exchange Amount among the aggregate principal amount of such Old Noteson a pro rata basis. Subject to the terms and conditions of the 2048 Exchange Offers, we will acceptfor exchange the Old Notes of any series validly tendered in the 2048 ExchangeOffers in accordance with the applicable "Acceptance Priority Level" (innumerical priority order) for such series as set forth in the table for the2048 Exchange Offers above (each, an "Acceptance Priority Level"), withAcceptance Priority Level 1 being the highest priority level. Subject to the2048 Maximum Exchange Amount, all Old Notes validly tendered in the 2048Exchange Offers that have a higher Acceptance Priority Level will be acceptedfor exchange before any validly tendered Old Notes in the 2048 Exchange Offersthat have a lower Acceptance Priority Level are accepted. If the remainingavailable portion of the 2048 Maximum Exchange Amount is not adequate to permitthe acceptance for exchange of all of the validly tendered Old Notes having aparticular Acceptance Priority Level, we will allocate such available 2048Maximum Exchange Amount among the aggregate principal amount of such validlytendered Old Notes having such Acceptance Priority Level on a pro rata basis,and any validly tendered Old Notes having a lower Acceptance Priority Levelwill not be accepted for exchange. The Exchange Offers will expire at 11:59 p.m. (New York City time) on March 11,2015, unless extended by Verizon (the "Expiration Date"). The Total ExchangePrice for each series of Old Notes, as well as the coupon rate for each seriesof New Notes, will be calculated at 11:00 a.m. (New York City time) on February25, 2015, unless extended by Verizon (the "Price Determination Date"). Eligible Holders that validly tender and do not validly withdraw their OldNotes at or prior to 5:00 p.m. (New York City time) on February 25, 2015(unless extended by Verizon, the "Early Participation Date") will be eligibleto receive the applicable Total Exchange Price, which includes the applicableEarly Participation Payment. Eligible Holders of Old Notes who validly tenderafter the Early Participation Date, but at or prior to the Expiration Date,will be eligible to receive the applicable Exchange Price, which is theapplicable Total Exchange Price minus the applicable Early ParticipationPayment (the "Exchange Price"). For each series of Old Notes, the TotalExchange Price and Exchange Price will be paid as specified below. Tenders of Old Notes in the Exchange Offers may be validly withdrawn at anytime at or prior to 5:00 p.m. (New York City time) on February 25, 2015, unlessextended by Verizon (the "Withdrawal Date"), but not thereafter, unlessadditional withdrawal rights are required by law. Subject to applicable law,Verizon, in its sole discretion, may extend the Early Participation Date or theExpiration Date for any reason, with or without extending the Withdrawal Date. The "Total Exchange Price" for each $1,000 principal amount of each series ofOld Notes tendered for exchange, and accepted by Verizon, will be equal to theprice (rounded to the nearest cent per $1,000 principal amount of Old Notes),determined in accordance with standard market practice, as described in theOffering Memorandum, that equates to the yield to maturity (the "Exchange OfferYield") equal to the sum of: (i) the yield, as calculated by the lead dealer managers for the Exchange Offers in accordance with standard market practice, that equates to the bid-side price of the Reference U.S. Treasury Security specified in the corresponding tables above for such series of Old Notes appearing at the Price Determination Date on the Bloomberg reference page specified in the corresponding tables above for such series of Old Notes (or any other recognized quotation source selected by the lead dealer managers in their sole discretion if such quotation report is not available or manifestly erroneous) plus the fixed spread specified in the corresponding tables above for such(ii) series of Old Notes. The Total Exchange Price payable by Verizon for each $1,000 principal amount ofOld Notes, other than the GTE Debentures, tendered for exchange, and acceptedby Verizon, will consist of a principal amount of the applicable series of NewNotes equal to the applicable Total Exchange Price. The Total Exchange Pricepayable by Verizon for each $1,000 principal amount of GTE Debentures tenderedfor exchange, and accepted by us, will consist of: -- the Cash Amount, plus -- the principal amount of New Notes due 2048 equal to (a) the Total Exchange Price for the GTE Debentures minus (b) the Cash Amount. The Exchange Prices will be paid in the same manner as the Total ExchangePrices except that the principal amount of applicable New Notes will be reducedby the applicable Early Participation Payment. The Exchange Price payable by usfor each $1,000 principal amount of GTE Debentures tendered for exchange, andaccepted by us, will consist of: -- the Cash Amount, plus -- the principal amount of New Notes due 2048 equal to (a) the Total Exchange Price for the GTE Debentures minus (b) the Early Participation Payment and (c) the Cash Amount. In addition to the applicable Total Exchange Price or applicable ExchangePrice, Eligible Holders whose Old Notes are accepted for exchange will be paidaccrued and unpaid interest on such Old Notes to, but not including, theSettlement Date. Each series of New Notes will bear interest at a rate per annum equal to thesum of (i) the yield of the applicable Reference U.S. Treasury Security, ascalculated by the lead dealer managers in accordance with standard marketpractice, that equates to the bid-side price of such applicable Reference U.S.Treasury Security appearing at the Price Determination Date on the applicableBloomberg reference page, or any other recognized quotation source selected bythe lead dealer managers in their sole discretion if such quotation report isnot available or manifestly erroneous, plus (ii) the applicable spread for suchseries of New Notes, such sum rounded to the third decimal place when expressedas a percentage. The applicable Reference U.S. Treasury Security, applicableBloomberg reference page and applicable spread for each series of New Notes areas follows: Reference U.S. New Notes Treasury Security Bloomberg Reference Page Spread (basis points) New Notes due 2036 3.125% due 8/15/44 FIT1 +170New Notes due 2048 3.125% due 8/15/44 FIT1 +195New Notes due 2055 3.125% due 8/15/44 FIT1 +210 Consummation of the Exchange Offers is subject to the satisfaction of certainconditions, including certain customary conditions, including the absence ofcertain adverse legal and market developments and the Accounting TreatmentCondition (as described in the Offering Memorandum). No Exchange Offer isconditioned upon any minimum amount of Old Notes being tendered or theconsummation of any other Exchange Offer, and, subject to applicable law, eachExchange Offer may be amended, extended or terminated individually. The "Settlement Date" for the Exchange Offers will be promptly following theExpiration Date and is expected to be March 13, 2015, which is the secondbusiness day after the Expiration Date. Verizon will not receive any cashproceeds from the Exchange Offers. The Exchange Offers are being extended only (1) to holders of Old Notes thatare "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 privatetransaction in reliance upon the exemption from the registration requirementsof the U.S. Securities Act provided by Section 4(a)(2) thereof and (2) outsidethe United States, to holders of Old Notes other than "U.S. persons" (asdefined in Rule 902 under Regulation S of the U.S. Securities Act) and who arenot acquiring New Notes for the account or benefit of a U.S. person, inoffshore transactions in compliance with Regulation S under the U.S. SecuritiesAct, and who are "Non-U.S. qualified offerees" (as defined in the OfferingMemorandum) (each of the foregoing, an "Eligible Holder"), and in each case whohave certified in an eligibility letter certain matters to Verizon, includingthe above status. Only Eligible Holders who have completed and returned aneligibility letter are authorized to receive the Offering Memorandum and toparticipate in the Exchange Offers. Holders of Old Notes who desire a copy ofthe eligibility letter may contact Global Bondholder Services Corporationtoll-free at (866) 470-3800 or at (212) 430-3774 (banks and brokerage firms).Holders may also obtain and complete an electronic copy of the eligibilityletter on the following website maintained by Global Bondholder Services:http://gbsc-usa.com/eligibility/verizon Eligible Holders are advised to check with any bank, securities broker or otherintermediary through which they hold Old Notes as to when such intermediaryneeds to receive instructions from an Eligible Holder in order for thatEligible Holder to be able to participate in, or (in the circumstances in whichrevocation is permitted) revoke their instruction to participate in, theExchange Offers before the deadlines specified herein and in the OfferingMemorandum. The deadlines set by each clearing system for the submission andwithdrawal of exchange instructions will also be earlier than the relevantdeadlines 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 notbe offered or sold in the United States absent registration or an applicableexemption from the registration requirements of the U.S. Securities Act and anyapplicable state securities laws. Verizon will enter into a registration rightsagreement with respect to the New Notes. This press release is not an offer to sell or a solicitation of an offer to buyany security. The Exchange Offers are being made solely by the OfferingMemorandum and only to such persons and in such jurisdictions as is permittedunder applicable law. This communication has not been approved by an authorized person for thepurposes of Section 21 of the Financial Services and Markets Act 2000, asamended (the "FSMA"). Accordingly, this communication is not being directed atpersons within the United Kingdom save in circumstances where section 21(1) ofthe FSMA does not apply. In particular, this communication is only addressed to and directed at: (A) inany Member State of the European Economic Area that has implemented theProspectus Directive (as defined below), qualified investors in that MemberState within the meaning of the Prospectus Directive and (B) (i) persons thatare outside the United Kingdom or (ii) persons in the United Kingdom fallingwithin 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 FinancialPromotion Order, or to other persons to whom it may otherwise lawfully becommunicated by virtue of an exemption to Section 21(1) of the FSMA orotherwise 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 Noteswill be engaged in only with, relevant persons. Any person who is not arelevant person should not act or rely on the Offering Memorandum or any of itscontents. For purposes of the foregoing, the "Prospectus Directive" means theProspectus Directive 2003/71/EC, as amended, including pursuant to Directive2010/73/EU. Cautionary Statement Regarding Forward-Looking Statements In this communication we have made forward-looking statements. These statementsare based on our estimates and assumptions and are subject to risks anduncertainties. Forward-looking statements include the information concerningour possible or assumed future results of operations. Forward-lookingstatements 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 statementscontained in the Private Securities Litigation Reform Act of 1995. Thefollowing important factors, along with those discussed in our filings with theSecurities and Exchange Commission (the "SEC"), could affect future results andcould cause those results to differ materially from those expressed in theforward-looking statements: adverse conditions in the U.S. and internationaleconomies; the effects of competition in the markets in which we operate;material changes in technology or technology substitution; disruption of ourkey suppliers' provisioning of products or services; changes in the regulatoryenvironment in which we operate, including any increase in restrictions on ourability to operate our networks; breaches of network or information technologysecurity, natural disasters, terrorist attacks or acts of war or significantlitigation and any resulting financial impact not covered by insurance; ourhigh level of indebtedness; an adverse change in the ratings afforded our debtsecurities by nationally accredited ratings organizations or adverse conditionsin the credit markets affecting the cost, including interest rates, and/oravailability of further financing; material adverse changes in labor matters,including labor negotiations, and any resulting financial and/or operationalimpact; significant increases in benefit plan costs or lower investment returnson plan assets; changes in tax laws or treaties, or in their interpretation;changes in accounting assumptions that regulatory agencies, including the SEC,may require or that result from changes in the accounting rules or theirapplication, which could result in an impact on earnings; and the inability toimplement our business strategies. SOURCE Verizon Communications Inc. CONTACT: Bob Varettoni, 908-559-6388, [email protected]