Sprint Set to Take on More Debt (S, PCS, CLWR)
Sprint Nextel Corp. (NYSE: S) is heading back to the bond market to raise $2 billion according to a report in The Wall Street Journal. The company’s board last week rejected a proposal to buy low-price competitor MetroPCS Communications Inc.…
Sprint Nextel Corp. (NYSE: S) is heading back to the bond market to raise $2 billion according to a report in The Wall Street Journal. The company’s board last week rejected a proposal to buy low-price competitor MetroPCS Communications Inc. (NYSE: PCS) for a reported $7.3 billion.
According to the WSJ’s sources, two tranches will be on offer. One is 8-year debt at an interest rate of 7%-7.125% for $1 billion and the second $1 billion tranche carries a term of 5 years and an interest rate of 9.25%. The first is guaranteed, while the second is not.
Sprint may use the proceeds to redeem or service outstanding debt, to expand and modernize its network, or to provide more assistance to its partner Clearwire Corp. (NASDAQ: CLWR)
The bonds are expected to be priced later today. The company’s shares are trading at $2.54 in the mid-afternoon today, up nearly 3%, in a 52-week range of $2.10-$6.45.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
