WASHINGTON—Sprint Nextel Corp.’s soon-to-be-spun-off local wireline business, Embarq Corp., has filed to issue as much as $4.49 billion in senior notes, according to information from the Securities and Exchange Commission.
Embarq said in the filing that it would issue Sprint Nextel three sets of notes worth about $1.5 billion, due in 2013, 2016 and 2036. According to the filing, “Sprint Nextel intends to transfer these notes to Sprint Capital Corp., its wholly owned subsidiary, which intends to sell the notes.”
Embarq would not receive any proceeds from the sale of the notes; proceeds would go instead to Sprint Capital. The notes are being issued in exchange for Sprint Nextel transferring its local wireline operations to Embarq as part of the spinoff of the wireline business. Embarq is set to have operations in 18 states once the spinoff is complete.
Also in the filing, Embarq mentioned plans to launch wireless services using a mobile virtual network operator model on Sprint Nextel’s CDMA wireless network.
“Following the spinoff, we expect to provide … CDMA-based wireless voice and data services in most of our local service territories to consumers and small business customers through a non-exclusive wholesale arrangement involving a mobile virtual network operator, or MVNO, relationship, with Sprint Nextel,” Embarq said in its filing. “We also expect to offer certain wireline voice and data, wireless and video services through sales agency and other wholesale agreements.”
