Verizon Stands to Pay $5.1B in Additional Interest and 2 Other Dow Movers to Watch
Verizon Communications Inc. (NYSE:VZ): Current price $48.05
A rally in Verizon’s bonds subsequent to its $49 billion offering indicates that the company will pay up to $5.1 billion more in interest for the certainty of finalizing the deal one week before the Federal Reserve could start tapering its record stimulus measures. Since the September 11 offering, yields on the securities have fallen off, with the $15 billion of 6.55 percent bonds due in September 2043 marking the biggest piece of the eight-part deal and trading at 109.5 cents on the dollar Tuesday, 9.6 cents higher than the issue price. This lowered the yield to 5.88 percent, implying that the company will pay roughly $101 million of extra interest per year on the notes than if it sold at the current market rates.