Deals
T-Mobile's Tie-Up With Sprint Would Make Junk-Bond Behemoth
- Combined company will have total debt of about $77 billion
- Leverage ‘not that scary’ given high Ebitda forecast: analyst
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The merger of T-Mobile US Inc. and Sprint Corp. would create the largest U.S. junk-bond borrower, as the companies seek to compete with the top two players in the country’s telecom industry.
The combination of the number three and four U.S. wireless carriers will have total debt of as much as $77 billion, according to a joint company presentation Sunday. T-Mobile’s debt ratings are already on review for downgrade from both Moody’s Investors Service and S&P Global Ratings as Sprint’s debt load will boost leverage. Having access to a larger asset base and improved liquidity profile will help Sprint, which may get upgraded to a stronger speculative-grade rating.