U.S. Cellular Corp. reported the sale of $444 million of 6.7-percent senior notes due 2033 priced at a discount to yield approximately 6.83 percent. The carrier added that it plans to file a prospectus supplement with the Securities and Exchange Commission in connection with the offering relating to a previous shelf registration statement filed May 15, 2002, that registered up to $500 million in debt securities for offer and sale, of which $370 million remained available prior to the latest offering.
U.S. Cellular said it intends to use proceeds from the offering, which was managed by Credit Suisse First Boston and JP Morgan, to repay a portion of short-term debt and for other corporate purposes.
SG Cowen telecommunications analyst Tom Watts noted strong demand for the offering allowed U.S. Cellular to increase the amount of notes from its original $400 million, and proceeds from the offering coupled with $95 million from the recent sale of U.S. Cellular’s south Texas markets to AT&T Wireless Services Inc. should support the carrier’s future capital expenditure plans as well as potential property acquisitions.
“We view the sale of the remaining [U.S. Cellular] property located in Florida likely in the next 12 months, which could also provide additional funds for expansion,” Watts added.
U.S. Cellular’s stock was trading down less than 1 percent early Thursday at $33.95 per share.
