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Sprint to retire $2.28B in debt


Rawvega
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http://finance.yahoo...-155200145.html

 

OVERLAND PARK, Kan.--(BUSINESS WIRE)--

Sprint (NYSE:S) announced today it intends to redeem a portion of 2014 debt maturities with an aggregate principal amount of $1,169,886,500 on Nov. 19, 2012. The securities comprising this debt retirement are the Nextel Communications, Inc. 5.95 percent Notes due 2014.

 

The Company also intends to redeem the remaining portion of 2015 debt maturities with an aggregate principal amount of approximately $1,109,960,000 on Nov. 19, 2012. The securities comprising this debt retirement are the Nextel Communications, Inc. 7.375 percent Notes due 2015.

 

The 2014 and 2015 Nextel Notes will be redeemed at par, plus accrued and unpaid interest until the redemption date. After this retirement, no 2014 or 2015 Nextel Notes will remain outstanding.

 

The remaining outstanding principal balance of the Company’s 2013 and 2014 Note maturities is $300 million and $181 million, respectively.

 

Having funding rocks it would seem as Sprint is paying off some debt early. This is the last of the debt that came along with Nextel as part of the merger. All vestiges of Nextel are thankfully being wiped away in one form or another.

 

After this move, Sprint should be pretty comfortable in terms of debt with only $981M ($481M of which is from their iPCS acquisition) in debt due between now and December 2016. At that point, the iDEN network will have been long gone, Network Vision will be finished, their Apple contract will be fulfilled so they *should* be sitting pretty then barring any unforeseen calamities.

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http://finance.yahoo...-155200145.html

 

 

 

Having funding rocks it would seem as Sprint is paying off some debt early. This is the last of the debt that came along with Nextel as part of the merger. All vestiges of Nextel are thankfully being wiped away in one form or another.

 

After this move, Sprint should be pretty comfortable in terms of debt with only $981M ($481M of which is from their iPCS acquisition) in debt due between now and December 2016. At that point, the iDEN network will have been long gone, Network Vision will be finished, their Apple contract will be fulfilled so they *should* be sitting pretty then barring any unforeseen calamities.

 

Having funding from softbank has nothing to do with extending debt maturities nor rolling debt.

 

The only thing that it helps with is the cost to extend debt maturities (not like they couldn't do it before).

 

The biggest helper is the low interest rate environment.

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This is essentially a refinancing. I saw a news release yesterday that they were putting out a new public debt offering. The new debt was being used to retire current debt. It does mean that their cash from the soft bank deal can be used for other things instead of debt repayment.

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Having funding from softbank has nothing to do with extending debt maturities nor rolling debt.

 

The only thing that it helps with is the cost to extend debt maturities (not like they couldn't do it before).

 

The biggest helper is the low interest rate environment.

 

I lower interest rate market only influences companies to re-issue new debt at the lower interest rate to cover older debt at the higher rate. This is not the case. Sprint completely wiped the debt out; therefore, making its ratios for the YE look better (i.e., acid test, debt to equity, and current ratio).

 

Edit: I stand corrected. This is such the case. See sprint's release.

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I lower interest rate market only influences companies to re-issue new debt at the lower interest rate to cover older debt at the higher rate. This is not the case. Sprint completely wiped the debt out; therefore, making its ratios for the YE look better (i.e., acid test, debt to equity, and current ratio).

 

Edit: I stand corrected. This is such the case. See sprint's release.

 

yar, they just rolled it out to 22 @ 6%

 

Given rates, wouldn't you?

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Even if the initial report was slightly off with respect to if it was Softbank capital or Sprint debt restructuring, the fact is that they would not have gotten 6% if Softbank was not here, and if it was Softbank's money, that was borrowed too. It makes little difference if they use that money to pay off debt than borrow later to pay for a M&A. Their net debt will be the same.

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