Fresh off a summer of financial gamesmanship, Sprint is looking to raise $6.5 billion through a pair of debt offerings set to close on Sept. 11. The carrier said the offerings would include one designed to raise $2.25 billion with 7.25% interest due 2021, and the other to raise $4.25 billion with 7.85% interest due in 2023.
Proceeds from the offering are set to be used for the usual “general corporate purposes,” including “redemptions or service requirements of outstanding debt and network expansion and modernization.” Analysts noted that it’s most likely the proceeds will be used to re-finance Clearwire’s debt that currently has an interest rate of 12%, as well as for further funding of its Network Vision upgrade program.
Sprint this summer acquired full control of Clearwire in a deal valued at around $5 billion, which was followed by Japan’s Softbank acquiring a 78% stake in Sprint for $21.6 billion. Standard & Poor’s Rating Services cut its long-term credit rating for Softbank to “BBB+” or what is termed a “junk” rating following the Sprint deal.
Sprint rival Verizon Communications this week announced plans to raise more than $60 billion in financing as it attempts to purchase Vodafone’s 45% stake in domestic carrier Verizon Wireless.
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