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Sprint Nextel pays off $1bn debt
17 November 2009
Sprint, the third largest mobile operator, has paid $1 billion of its $4.5 billion debt, in order to reduce its expenses as it seeks to cut costs
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[Sprint]
[finance]
[Clearwire]
[4G]
[AT&T]
[Verizon Wireless]
Comment: The Sprint management team is having to take some tough decisions in order to restore the company’s position, though it is fighting to retain customers in the face of competition from AT&T and Verizon Wireless. It is putting much of its wireless efforts into its investment in Clearwire and the WiMax services it offers on Clearwire’s infrastructure.
Sprint Nextel has made a $1 billion outstanding payment on its $4.5 billion revolving credit line. The wireless carrier is looking to reduce its expenses to offset the decrease in the subscriber base.
The lead arrangers on the loan were JPMorgan Chase and Citigroup. Sprint had $5.9 billion in cash at the end of the third quarter and $21.7 billion in total debt. It also had $1.6 billion in borrowing capacity under its revolving facility.
The company is considering job cuts to restore profitability as the client base is moving to rivals such as AT&T and Verizon Wireless.
Sprint may add over 300,000 subscribers in 2010 and will obtain 1.2 million customers from its acquisition of Virgin Mobile USA.
The company is also looking to acquire one its independent affiliates, iPCS, for $426 million, along with investing about $1.2 billion in majority-owned Clearwire. GTB