RESTON, Va.-Nextel Communications Inc. announced it has entered a new five-year $4 billion revolving credit facility, increasing the company’s borrowing capacity by $1.4 billion and reducing its borrowing costs. The move comes a week after the Federal Communications Commission said Nextel must secure a letter of credit for $2.5 billion to pay to relocate incumbents as part of the FCC’s proposed 800 MHz interference plan.
The new credit line replaces an older loan and revolving credit facilities that totaled $2.6 billion. Nextel said it borrowed $1 billion from the new facility and used $476 million cash to repay debt on those loans.
“The closing of our new $4 billion revolver represents another important milestone on our path to investment grade,” said Paul Saleh, Nextel’s executive vice president and chief financial officer. “Nextel’s consistently strong financial results, positive credit ratings trajectory, and favorable bank market conditions combined to produce exceptional demand for our new revolving credit facility. We are increasing our liquidity while at the same time reducing our interest rates, extending our maturities and improving our overall credit profile. We have enhanced our financial flexibility, and our balance sheet has never been stronger.”
