Verizon Communications is preparing to issue $800 in securitized bonds, secured by revenue from device payment plan contracts, and issue the debt through two series of notes, 2024-6 and 2024-7 through the Verizon Master Trust, both of which will close on September 18.
Bank of America is lead underwriter on both series, according to the rating agencies. Asset Securitization Report's deal database says Deutsche Bank Securities, Morgan Stanley and Wells Fargo Securities join BofA as managers on the deal.
VZMT 2024-6 will issue notes through four tranches of A, B and C notes, and the notes in the 2024-6 series have a legal final maturity date of Aug. 20, 2030, according to Moody's Ratings.
S&P Global Ratings, which also assessed the notes, says the 2024-6 series has an initial revolving period up to three years. If the transaction enters amortization, S&P said, the A, B, and C notes will benefit from 20.6%, 15.6% and 12.9% of credit support, respectively. Those support levels will provide coverage of about 5.2x, 3.9x and 3.2x on its expected 4.0% loss for the A, B and C notes, respectively, the rating agency said.
The 2024-7 series will issue notes through three tranches of A, B and C classes, which will mature two years later, Moody's and S&P said. S&P says the 2024-7 series has a potentially longer revolving period, five years. In its case, should the notes enter amortization the A, B and C notes have 20.6%, 15.5% and 12.7% in credit support available, respectively.
The issuances have similar capital structures. Across both deals, the class A notes have total initial hard credit enhancements of 19.25% of the pool balance. Class B notes benefit from 13.00% in total hard credit enhancement, and class C notes benefit from 9.25% in credit enhancement, according to Moody's.
Cellco Partnership, the servicer on both series of notes, is considered strong, with a Baa1 rating and stable outlook from Moody's. Other credit strengths include that cell phones are considered a high-use product, so customers are likely to prioritize paying those bills.
Yet as a master trust, VZMT can issue additional series of notes and other financings that can have different eligibility criteria and concentration limits.
Moody's assigns Aaa to the A1A and A1B notes; Aa1 to the class B notes; and A1 to the class C notes on the 2024-6 notes. On the 2024-7 notes Moody's assigned Aaa to the A notes; Aa1 to the class B notes and Aa3 to the class C notes.
S&P assigns AAA to the A notes; AA to the class B notes; and A to the class C notes on the 2024-6 notes. For the 2024-7 notes; S&P assigned AAA, AA and A to the classes A, B and C notes.
