Verizon needed money for its Vodaphone deal and they put on a clinic in how to raise money in the corporate bond market, reeling in $49 billion via 8 bonds ranging from 3-30 years. The yields range from about 3.5% to 6.5% at the long end.
To put that into perspective, Apple launched a six-part $17 billion corporate bond deal on April 30. At the time, it was the largest ever corporate deal. To add some more perspective, the Facebook IPO was the biggest in history at $104 billion.
The Apple bond deal marked the top of the bond market (yields bottomed May 3) and you have to wonder if this points to another leg. All the corporate debt could make things a bit trickier for the US Treasury, which is selling $21 billion in 10-year notes at the top of the hour. The market is expecting a yield around 2.97% — which is a two year high.
You also have to wonder if the Verizon-Vodafone deal and related flows are behind the latest leg on GBP/USD strength.
Verizon Vodafone
The deal has a large cash component. The closing date is still sometime away but deals of that size are always hedged ahead of time.
