“The new issue concession is significant,” Dorian Garay, a New York-based money manager at ING Investment Management, which oversees about $230 billion, said yesterday in a telephone interview. “They’re trying to lock in interest rates now because of all the concern about rising rates, and at the same time lock up most of the funding for the acquisition, so they have to pay up for sure.”

Independent bond research firm CreditSights Inc. issued a report yesterday reiterating its “outperform” recommendation on Verizon’s bonds, saying the yield spreads offered were “much wider” than for previously issued debt of the company and those sold by rival AT&T Inc.

Dallas-based AT&T sold $1.5 billion of 10-year debentures in December at a spread of 105 basis points, according to data compiled by Bloomberg. That’s 120 basis points, or 1.2 percentage point, lower than the 225 basis-point spread Verizon offered for similar-maturity debt.

Credit Ratings

Verizon had its credit grades cut to Baa1 by Moody’s Investors Service and BBB+ at Standard & Poor’s on Sept. 2, with both firms citing heightened leverage from the acquisition. The purchase may boost Verizon’s ratio of debt to cash flow to 3.4 from 3, according to S&P, which it said will contribute to a “significant” financial risk profile.

“We believe almost all excess cash flow will be used for de-levering in the next few years,” analysts at CreditSights said in their report. The firm noted that Verizon officers said on a call with investors and analysts after the Verizon Wireless purchase announcement that it may be able to get back to its previous credit rating of A3 as its leverage shrinks to about 2 times.

As the Federal Reserve has signaled it may begin tapering its $85 billion in monthly bond purchases that have bolstered credit markets, the Bank of America Merrill Lynch U.S. Corporate Index has lost 4.12 percent since year-end. That’s poised for the worst performance since a 6.82 percent decline in 2008 as Lehman Brothers Holdings Inc.’s collapse ushered in the worst financial crisis since the Great Depression.

Floating Notes

Yields on the debt increased to 3.59 percent yesterday from a record-low 2.65 percent on May 2, index data show.

The second-biggest U.S. telephone carrier issued fixed-rate debt with maturities ranging from three to 30 years as well as two portions of floating-rate securities.