UbiquiTel Inc., a Bala Cynwyd, Pa., affiliate of Sprint PCS, plans to raise $550 million in debt and equity to fully fund network construction, expected to be largely completed by the end of 2001.
Notwithstanding its East Coast headquarters, UbiquiTel has an exclusive agreement to provide Sprint PCS brand services in a territory covering parts of California, Nevada, Washington, Montana, Idaho, Utah, Indiana and Kentucky. Its footprint borders several large Sprint PCS markets, like Las Vegas, and also encompasses other high-traffic areas, like Lake Tahoe, Calif., national parks, college towns and transportation corridors.
The company, whose founders include several former Comcast Cellular Corp. executives, registered in March with the Securities and Exchange Commission for an initial public offering. Donaldson, Lufkin & Jenrette Securities Corp. is lead underwriter for the IPO, anticipated to raise $150 million.
In addition, UbiquiTel hopes to raise an equal amount in 10-year, senior subordinated discount notes. It also has obtained a $250 million senior secured credit facility. Moody’s Investors Service gave the planned note issue a B3 speculative grade rating and the credit facility a slightly higher rating of B2.
“As the fourth Sprint PCS affiliate to come to market, after Alamosa PCS, US Unwired and AirGate PCS, UbiquiTel should benefit from the apparent success of the affiliate program as a viable model for expanding coverage,” Moody’s analysts Michael Rowan and Marcus C. Jones said in their March 28 rating report.
