May 29 (Bloomberg) -- Sprint Nextel Corp., the third-largest U.S. wireless operator, received a $1 billion credit facility to finance the purchase of equipment from Sweden’s Ericsson AB..
Deutsche Bank AG helped arrange the secured loan, which will expire in March 2017, Sprint said today in a statement distributed by Business Wire.
The deal with Ericsson is part of the “Network Vision” project, which may be backed by as much as another $2 billion of equipment financing. Alcatel-Lucent, based in Paris, and South Korea’s Samsung Electronics Co. are Sprint’s two other equipment vendors assigned to the long-term evolution, or LTE, network construction plan, as Sprint tries to catch up with AT&T Inc. and Verizon Wireless in the faster network technology.
“We are still in discussions with the other vendors and we have nothing to announce at this time,” said Scott Sloat, a Sprint spokesman.
Joe Euteneuer, chief financial officer at the Overland Park, Kansas-based company, said on an April 25 earnings call that Sprint’s equipment financing would be between $1 billion to $3 billion.
The LTE push leaves Sprint coping with rising expenses that include a four-year, $15.5 billion contract to sell the iPhone and $10 billion for network expansion over the next two years. Capital spending increased 44 percent to $800 million in the first quarter from the first three months of 2011.
The company expects to have LTE service in six major cities, including Dallas and Baltimore, by mid-year.
In a separate statement today, Sprint said it plans to redeem a portion of its 6.875 percent notes that expire next year.
Sprint rose 2 cents to $2.64 at 12:32 p.m. in New York. That compares with a 52-week high of $6.45 per share and a 52-week low of $2.10, according to data compiled by Bloomberg.