Verizon Communications Inc. sold US$12 billion of bonds in the fifth largest transaction of the year as blue-chip companies rushed to squeeze in debt sales following optimistic news Monday regarding a potential COVID-19 vaccine.

The telecommunications giant sold the debt in five parts, with proceeds earmarked for spectrum costs and repayment of outstanding obligations, according to a person with knowledge of the matter. The longest portion of the offering, a US$2 billion 40-year security, yields 1.3 percentage points above Treasuries, after initial discussions of around 1.5 percentage points, said the person, who asked not to be identified as the details are private.

The largest U.S. wireless carrier needs more airwaves in order to keep up with the growing demand for network capacity. The company is pouring billions of dollars into 5G network expansion. This next generation of wireless technology promises dramatically higher speeds and instant response times to facilitate breakthroughs in fields such as robotic surgery and autonomous cars.

Verizon spent nearly US$2 billion on 5G spectrum lease rights at a federal auction in September, and the company is expected to spend a lot more in the C-band auction which begins Dec. 8.

“The C-band spectrum is a ‘must-have’ for Verizon, so investors should consider the possibility that Verizon spends $20 billion or more,” CreditSights analysts led by Davis Hebert wrote in a note Tuesday.

Verizon led five borrowers tapping the investment-grade market Tuesday to take advantage of Monday’s broad rally after President-elect Joe Biden’s victory and better than expected news from Pfizer Inc. and BioNTech SE on the development of a coronavirus vaccine. Nine borrowers priced US$18.9 billion Monday, the largest single-day volume total since Sept. 23.

Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co. and Wells Fargo & Co. managed the Verizon bond sale, the person said.

--With assistance from Todd Shields and Boris Korby.