Sprint Nextel Corp. (NYSE: S) is heading back to the bond market to raise $2 billion according to a report in The Wall Street Journal. The company’s board last week rejected a proposal to buy low-price competitor MetroPCS Communications Inc. (NYSE: PCS) for a reported $7.3 billion.
According to the WSJ’s sources, two tranches will be on offer. One is 8-year debt at an interest rate of 7%-7.125% for $1 billion and the second $1 billion tranche carries a term of 5 years and an interest rate of 9.25%. The first is guaranteed, while the second is not.
Sprint may use the proceeds to redeem or service outstanding debt, to expand and modernize its network, or to provide more assistance to its partner Clearwire Corp. (NASDAQ: CLWR)
The bonds are expected to be priced later today. The company’s shares are trading at $2.54 in the mid-afternoon today, up nearly 3%, in a 52-week range of $2.10-$6.45.
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