NEW YORK-Good news for carrier access to capital arrived from the debt markets May 9 as WorldCom Inc. broke a record for debt deal size by a U.S. corporation and a unit of Verizon Communications Inc. issued convertible bonds that comprised the third-largest sale of its kind in the United States.
WorldCom Inc. sold publicly an $11.9 billion issue of notes due in 2004, 2011 and 2031. Due to investor demand for the securities, priced to yield up to 8.4-percent interest, the company raised the size of the issue from the $7 billion to $8 billion it originally planned to sell.
Proceeds will be used to repay about $9 billion in debt and also may go toward business expansion or acquisitions.
Verizon Global Funding Corp., a financing conduit for Verizon Communications, placed privately a $3 billion issue of zero-coupon notes due 2021. Instead of paying interest, these debt securities are convertible into shares of Verizon stock.
In a press release, Verizon said it sold the bonds “to obtain low-cost funds for general corporate purposes.”
Verizon Global Funding raised an additional $2 billion earlier in May through a private placement of $2 billion in notes that mature on Nov. 4, 2002.
Proceeds of this issue will serve as interim financing for wireless spectrum licenses, for which Verizon Wireless paid $8 billion in a Federal Communications Commission auction.
