T-Mobile Unit Planning $2 Billion Offering of Notes in Two Parts
A unit of T-Mobile US Inc. (TMUS), the country’s fourth-largest mobile-phone carrier, plans to issue $2 billion of senior notes in two parts.
T-Mobile USA Inc. intends to sell bonds due in 2022 that can be redeemed in four years and securities that mature in 2024 that can be called in five years, the Bellevue, Washington-based company said in a statement today.
Proceeds from the sale may be used for general corporate purposes, including capital investments, enhancing financial flexibility and purchasing additional spectrum, according to the release.
T-Mobile’s $1.25 billion of 6.464 percent senior notes due in 2019 traded at 105.5 cents on the dollar Nov. 14, yielding 5.29 percent, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt, which was issued Oct. 8, is rated Ba3 by Moody’s Investors Service.
JPMorgan Chase & Co., Credit Suisse Group AG, Deutsche Bank AG, Citigroup Inc., Goldman Sachs Group Inc., Royal Bank of Canada and Royal Bank of Scotland Plc are managing the sale, according to the statement.
T-Mobile plans use the proceeds from a $1.62 billion equity offering to acquire wireless airwaves, according to a Nov. 15 regulatory filing. The company said it’s interested in lower-band spectrum and considering a purchase from another company, the filing said.
One of the largest chunks of low-band spectrum is the so-called A Block held by Verizon Communications Inc., Walt Piecyk, an analyst with BTIG LLC in New York, said in an e-mail today.
“T-Mobile stockpiling that much cash is a sign that the A Block might be in play,” Piecyk said.
T-Mobile would have to pay about $4 billion if it wanted to fill in the gaps for full coverage of its A-Block spectrum, Piecyk wrote in a Nov. 15 note.
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