Why Verizon Is Selling Smartphone Payment-Backed Bonds

Verizon, the largest U.S. wireless carrier, is planning to sell the first public debt offering backed by smartphone equipment installment plan payments during Q3 2016, in a move that could expand its capital sources while reducing financing costs. The approximately $1.2 billion worth of bonds will be backed by EIP payments from close to 2.5 million of the carrier’s subscribers.  Below, we take a look at the rationale behind the move and the potential benefits for Verizon.