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Sprint’s Bond Offering, Another Lifeline (S, CLWR)

Photo of Jon C. Ogg
By Jon C. Ogg Published

Sprint Nextel Corp. (NYSE: S) is effectively trading only as a stock option now that its common stock is trading at such a low price.  Investors who want to own Sprint might want to consider the debt in the company.

The company recently raised $2 billion in bond offerings and those deals have now closed…

  • $1 billion aggregate principal amount of 9.125% Notes due 2017
  • $1 billion aggregate principal amount of 7% Guaranteed Notes due 2020

The 2020 Notes are guaranteed by the company’s subsidiaries that guarantee its existing credit agreements.

Sprint intends to use the capital for general corporate purposes… which may include redemptions or service requirements of outstanding debt, network expansion and modernization and potential funding of Clearwire Corporation (NASDAQ: CLWR) and its subsidiary Clearwire Communications LLC.

Clearwire shares are down 3% today, but this bond offering helped the stock rise from $2.05 to $2.40 before today.  Sprint Nextel shares are up 2.3% at $2.53 today and shares were down around $2.40 before this bond offering.

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Photo of Jon C. Ogg
About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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