Sprint Nextel Corp. said it has borrowed $1 billion through a group of banks to finance part of its Network Vision upgrade.
It separately plans to retire $1 billion in bond debt next month that is due next year.
Deutsche Bank leads the syndicate of new lenders providing funding for Sprint’s purchases of equipment from Ericsson for the network upgrade. Sprint said previously it sought up to $3 billion in vendor financing for the project in addition to raising money through its own bond sales.
The loan is secured by the equipment Sprint is buying from Ericsson, based in Stockholm, Sweden. Sprint also is guaranteeing repayment, as are its subsidiaries that already guarantee Sprint’s bank debts.
Sprint’s new loan with the bank group expires in March 2017. It will carry about a 6 percent interest rate thanks to Sweden’s export agency, according to analyst Jennifer Fritzsche at Wells Fargo Securities LLC.
In an email to customers, Fritzsche said the announcement “serves as further credibility” that Sprint is progressing with its Network Vision plan.
Redemption of the 2013 bonds will come June 8. The debt costs Sprint 6.875 percent interest. There will be $473 million of the debt still outstanding.