Site Map Icon
RSS Feed icon
CWA Local 2336
March 18, 2018
Member Login


Not registered yet?
Click Here to sign-up

Forgot Your Login?
RED on Thursdays

Wearing RED on Thursdays shows our collective support for our Union Contract.

<< March 2018 >>
1 2 3
4 5 6 7 8 9 10
11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30 31
Events Calendar image
Events Calendar
Message Board image
Message Board
Classified Ads image
Classified Ads
Downloads image
News Feeds image
News Feeds
Photo Gallery image
Photo Gallery
Weather Report
UnionActive Newswire
Join the Newswire!
Updated: Mar. 18 (06:03)

Meeting Notice
AMFA Local 32
PRESS RELEASE - BRS Reaches Tenative Agreement With Amtrak
Brotherhood of Railroad Signalmen
Sickle Cell Warrior
UFCW Minority Coalition
UFCW Black History Program
UFCW Minority Coalition
A political history of economic inequality
Great Plains Laborers' District Council
Members Unite for Fair Pay
AFSCME Local 2067
Action Center
Verizon Weighs Selling Bonds Backed by Customers’ Phone Payments
Posted On: Mar 09, 2016

Verizon Communications Inc., the largest U.S. wireless provider, may sell bonds backed by the payments its customers owe for financing phones.

While other companies such as Sprint Corp. have used the technique to obtain private loans, Verizon would be one of the first wireless carriers to issue bonds that use expected monthly phone payments from its customers as collateral. The company is looking into the option because U.S. banks have limited capacity to purchase such payments, Chief Financial Officer Fran Shammo said at an investor conference Tuesday.

There’s a “lower cost of capital” in this market, Shammo said. Verizon has talked to credit rating companies about the idea and expects to announce next steps in the first half of the year, he said.

Verizon, the nation’s largest wireless carrier, has been looking to reduce debt and free up cash as the wireless market matures and competition increases. The infusion of cash borrowed against phone payments would help ease the company’s $110 billion debt burden ahead of a federal auction of airwaves this spring, at which Verizon is expected to

bid $6.2 billion, according to a Bloomberg survey of analysts in January.

“There are a few things pulling in different directions at Verizon,” said Mike McCormack, an analyst at Jefferies LLC.

Over the last few years, the industry has moved more customers to plans where they pay for their phones in installments, instead of including the phone as part of the service contract. The carriers have amassed about $40 billion worth of outstanding payments, McCormack said. That’s an

asset they can use to secure funding. AT&T, the No. 2 carrier, sold $4.4 billion worth of phone-payment receivables to bondholders last year. But instead of selling its phone payments, Verizon wants to borrow against them.

No Market Yet

“The other carriers don’t do this yet simply because the asset-backed security market for handsets is not yet established,” said Kevin Roe, of Roe Equity Research LLC. Once there’s a market, more will participate, he said.

In November, Sprint Corp. took $1.2 billion in financing from a phone leasing company

created by majority owner SoftBank Group Corp. to help lower equipment costs and relieve pressure on the unprofitable carrier’s dwindling cash supply.

One potential drawback to these financing plans is the creditworthiness of customers, McCormack said.

“It’s a big sum of money, and the recourse -- if there’s a problem -- goes back to the carrier,” McCormack said.

Organize Today
Learn more about organizing your workplace!

Click Here
Contact Elected Officials!
Newsletter Sign-up
Sign-up for newsletter & email updates
Blog Topics
Blog Updates
Important Links
Union Built PC
Motor Vehicle Certification Program
Union Plus
Communications Workers of America Local 2336
Copyright © 2018, All Rights Reserved.
Powered By UnionActive™

Top of Page image