Collateralized debt has a somewhat mixed history, having been a major fact in the housing collapse of 2008 and the Great Recession that followed. But Sprint is going that route with debt issuance that collateralizes the loans by pledging portions of its mobile spectrum.
Sprint plans to raise $3.5 billion in debt backed by 14 percent of its total spectrum holdings on a megahertz-per-potential customer covered basis.
The carrier said the wireless spectrum being offered up includes slices of its 1.9 GHz and 2.5 GHz holdings and is being used by approximately 77 percent of its 2.5 GHz sites and 33 percent of its 1.9 GHz sites.
The move calls for those assets to be leased back to the carrier as part of a “long-term” lease agreement with rental payments “sufficient to service the notes
The spectrum will be leased back to Sprint Communications Inc. pursuant to a long-term lease agreement.
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