Company to generate $1.2 billion through promissory bonds
IFM Correspondent
July 27, 2016: Two days after the Yahoo acquisition, Verizon announced its Q2 results, wherein available cash totalled $2.86. This has led to concerns about financing the Yahoo deal, given the high debt-to-equity ratio. The company missed the Street’s sales estimate of $30.74 billion by 0.68% as its top-line clocked in $30.53 billion, but reported net profit of $3.99 billion, which was higher than analysts’ estimate of $3.75 billion.
The debt continues to remain a concern for investors. As of June 30, it had $99.73 billion in debt obligations, which reflects debt to equity ratio of around 4.8:1.
The company intends to generate around $1.2 billion through sale of promissory bonds. Although the pricing and interest details are yet to be disclosed, these bonds are expected to be offered in the current quarter. Bank of America, Mitsubishi UFJ Financial Group (MUFG) and Barclays have been appointed to initiate the transaction. The company explained that the monthly amount received from its existing mobile users will be diverted to pay back the principal amount and accrued interest on these bonds.