Verizon Wireless 2009 Annual Report Download - page 60

aggregate principal amount of three and five-year fixed rate notes in a
private placement resulting in cash proceeds of $4.2 billion, net of dis-
counts and issuance costs.
2008
In December 2008, Verizon Wireless and Verizon Wireless Capital LLC, as
the borrowers, entered into a $17.0 billion credit facility (Bridge Facility).
On January 9, 2009, Verizon Wireless borrowed $12.4 billion under the
Bridge Facility in order to complete the acquisition of Alltel and repay
certain of Alltel’s outstanding debt. Verizon Wireless used cash gener-
ated from operations and the net proceeds from the sale of the notes
in private placements issued in February 2009, May 2009 and June 2009,
which are described above, to repay all of the borrowings under the
Bridge Facility. No borrowings were outstanding under the Bridge Facility
at December 31, 2009 and the commitments under the Bridge Facility
were terminated.
In December 2008, Verizon Wireless and Verizon Wireless Capital LLC, co-
issued €650 million of 7.625% notes due 2011, €500 million of 8.750%
notes due 2015 and £600 million of 8.875% notes due 2018. Concurrent
with these offerings, Verizon Wireless entered into cross currency swaps
to fix our future interest and principal payments in U.S. dollars as well as
to exchange the net proceeds from British Pounds Sterling and Euros into
U.S. dollars (see Note 10). The net proceeds of $2.4 billion, net of discounts
and issuance costs were used in connection with the Alltel acquisition.
In November 2008, Verizon Wireless and Verizon Wireless Capital LLC co-
issued a private placement of $1.3 billion of 7.375% notes due 2013 and
$2.3 billion of 8.500% notes due 2018 resulting in cash proceeds of $3.5
billion net of discounts and issuance costs. The net proceeds from the
sale of these notes were used in connection with the Alltel acquisition on
January 9, 2009 (see Note 2).
On September 30, 2008, Verizon Wireless and Verizon Wireless Capital LLC
entered into a $4.4 billion Three-Year Term Loan Facility Agreement (Three-
Year Term Facility) with a maturity date of September 30, 2011. Verizon
Wireless borrowed $4.4 billion under the Three-Year Term Facility in order
to repay a portion of the 364-Day Credit Agreement as described below.
Borrowings under the Three-Year Term Facility currently bear interest at a
variable rate based on LIBOR plus 100 basis points. During 2009, the first
principal payment was made to reduce the outstanding balance as of
December 31, 2009 to $4 billion. The Three-Year Term Facility includes a
requirement to maintain a certain leverage ratio.
On June 5, 2008, Verizon Wireless entered into a $7.6 billion 364-Day Credit
Agreement. During 2008, Verizon Wireless utilized this facility primarily to
purchase Alltel debt obligations and pay fees and expenses incurred in
connection therewith, finance the acquisition of Rural Cellular and repay
the outstanding Rural Cellular debt and pay fees and expenses incurred
in connection therewith. During 2008, the borrowings under the 364-Day
Credit Agreement were repaid.
Verizon Communications – Notes Payable and Other
2009
During 2009, Verizon issued $1.8 billion of 6.35% notes due 2019 and
$1.0 billion of 7.35% notes due 2039, resulting in cash proceeds of $2.7
billion, net of discounts and issuance costs, which was used to reduce
our commercial paper borrowings, repay maturing debt and for gen-
eral corporate purposes. In January 2009, Verizon utilized a $0.2 billion
floating rate vendor financing facility due 2010. During 2009, $0.5 billion
of floating rate notes due 2009 and $0.1 billion of 8.23% notes matured
and were repaid.
2008
In November 2008, Verizon issued $2.0 billion of 8.75% notes due 2018
and $1.3 billion of 8.95% notes due 2039, which resulted in cash proceeds
of $3.2 billion net of discount and issuance costs. In April 2008, Verizon
issued $1.3 billion of 5.25% notes due 2013, $1.5 billion of 6.10% notes
due 2018, and $1.3 billion of 6.90% notes due 2038, resulting in cash
proceeds of $4.0 billion, net of discounts and issuance costs. In February
2008, Verizon issued $0.8 billion of 4.35% notes due 2013, $1.5 billion of
5.50% notes due 2018, and $1.8 billion of 6.40% notes due 2038, resulting
in cash proceeds of $4.0 billion, net of discounts and issuance costs. In
January 2008, Verizon utilized a $0.2 billion fixed rate vendor financing
facility due 2010. During the first quarter of 2008, $1.0 billion of Verizon
Communications Inc. 4.0% notes matured and were repaid.
Telephone and Other Subsidiary Debt
During 2009, we redeemed $0.1 billion of 6.8% Verizon New Jersey Inc.
debentures, $0.3 billion of 6.7% notes and $0.2 billion of 5.5% Verizon
California Inc. notes and $0.2 billion of 5.875% Verizon New England Inc.
notes. In April 2009, we redeemed $0.5 billion of 7.51% GTE Corporation
notes.
During 2008, we redeemed $0.2 billion of 5.55% Verizon Northwest notes,
$0.3 billion of 6.9% and $0.3 billion of 5.65% Verizon North Inc. notes, $0.1
billion of 7.0% Verizon California Inc. notes, $0.3 billion of 6.0% Verizon
New York Inc. notes, $0.3 billion of 6.46% GTE Corporation notes and $0.1
billion of 6.0% Verizon South Inc. notes.
Guarantees
We guarantee the debt obligations of GTE Corporation (but not the debt
of its subsidiary or affiliate companies) that were issued and outstanding
prior to July 1, 2003. As of December 31, 2009, $1.7 billion principal
amount of these obligations remained outstanding.
Debt Covenants
We and our consolidated subsidiaries are in compliance with all of our
debt covenants.
Maturities of Long-Term Debt
Maturities of long-term debt outstanding at December 31, 2009 are as
follows:
Years (dollars in millions)
2010 $ 6,105
2011 9,646
2012 5,884
2013 5,857
2014 3,524
Thereafter 30,140
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Notes to Consolidated Financial Statements continued