Sprint Corp. was set Wednesday to borrow $6.5 billion in the bond market at interest rates higher than 7 percent.
By MARK DAVIS
The Kansas City Star
Bloomberg News called the offering the “biggest junk (bond) sale” of the year as Sprint’s debt still carries a non-investment grade rating.
The Overland Park-based wireless telephone company said it planned to sell $4.25 billion of bonds that will come due in 10 years and pay 7.875 percent interest. It also will sell $2.25 billion of bonds that come due in eight years and pay 7.25 percent interest.
Sprint said it could use the money to cover interest owed on its existing debt, make payment when other debts come due, or to expand and modernize its wireless network. Officially, the money is available for any purpose.
The company had talked recently about its ability to raise money in the bond market, including the potential to refinance some of its existing debt.
“Our capacity to go out and raise unsecured debt is still very robust. I think our debt trades very well,” chief financial officer Joe Euteneuer told analysts in July, according to a transcript from Seeking Alpha.
A Sprint announcement said the bonds would be sold privately to “qualified institutional buyers” under rules that free the company from registering the bonds with the Securities and Exchange Commission.
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