Sprint Nextel Corp., the third-largest U.S. wireless carrier, sold $1.5 billion of bonds that may fund debt refinancing, a network expansion and a cash infusion for Clearwire Corp.
The company issued eight-year, 7 percent notes yielding 568 basis points more than similar-maturity Treasuries after dropping an offering for 10-year bonds, according to data compiled by Bloomberg. Moody’s Investors Service ranked the bonds B3, six levels below investment grade, the ratings company said in a statement today.
Sprint reported second-quarter revenue that beat analysts’ projections after demand for iPhones bolstered customer spending on data plans. Sales rose 6.4 percent to $8.84 billion, Overland Park, Kansas-based Sprint said July 26 in a statement. Analysts had estimated $8.73 billion on average, according to data compiled by Bloomberg.
The communications provider may use proceeds of the sale to fund Clearwire, a wireless carrier building a network across the U.S., according to a regulatory filing today. Sprint is Clearwire’s biggest customer.
The company last tapped the bond market in July. Its $1 billion of 9.125 percent bonds due March 2017 traded at 111.8 cents on the dollar yesterday for a yield of 6.13 percent in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
JPMorgan Chase & Co, Deutsche Bank AG, Barclays Plc, Bank of America Corp., Citigroup Inc. and Goldman Sachs Group Inc. managed the sale. Verizon Wireless and AT&T Inc. are the two largest U.S. carriers.