NEW YORK-Nextel Communications Inc., McLean, Va., is raising $795 million in new
financing in the form of $300 million each in 12-percent senior notes due 2008 and zero coupon convertible preferred
stock due 2013, as well as a $195 million term loan.
Moody’s Investors Service Inc., New York, called the planned
financings “a good example of the company’s opportunistic use of the capital markets.”
The rating
agency assigned speculative grade ratings of B2 to the senior note issue, Caa to the convertible preferred stock and Ba3
to the term loan’s secured credit facility.
“The ratings reflect management’s continued success in executing its
business plan, the market acceptance of Nextel’s unique service offering and the company’s good access to
capital,” Moody’s analysts Pamela Stumpp and Marcus C. Jones said.
“[They] also recognize the risks
inherent in managing a high-growth company, the continuing need for additional capital to achieve this growth, a
highly leveraged balance sheet, the expectation that future growth will be largely debt financed and the highly
competitive nature of the wireless industry.”
