Sprint to issue $6.5 billion in new debt

Sprint to issue $6.5 billion in new debt
To be used for “general corporate purposes” including redemptions for current debt that needs to be paid, Sprint has put together a series of bonds for sale. In effect, borrowing from Peter to pay Paul.

Such practices are not uncommon in the corporate world, though America’s third largest carrier has been having a tough time chipping away at debt accumulated from its acquisition of Nextel years ago.

Now that the Nextel network is shut down, Clearwire is in the stable and SoftBank has taken majority ownership of the company, Sprint needs to focus on actually making money at some point, something that has eluded the carrier for some time now.

Unfortunately, Sprint got into a bidding war with DISH over Clearwire, the latter pulling over $1 billion extra in the process. Its net income to revenues has been negative since anyone can remember, putting a lot of pressure on the carrier. Aggressive pricing plans, "unlimited data" and even availability of the iPhone has, thus far, not attracted as many subscribers as hoped.

2014 (or hopefully this holiday season) is viewed as when SoftBank will work something disruptive to draw customers to Sprint again. In the mean time however, money needs to change hands. Of the $6.5 billion in new debt being issued, $2.25 billion will be in 8-year notes at 7.25% and $4.25 billion will be 10-year notes at 7.875%.

source: Sprint

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29 Comments

1. HASHTAG unregistered

Sprint isn't going to gain the customer base it wants unless they work hard(er) on beefing up their network. Yes, they may have unlimited data and a somewhat acceptable price for its plans, but their data speeds are well below spectacular and their LTE speeds aren't that impressive either (my average speeds at highest were 4.5 mbs down and 2.0 up). And it also seems like Sprint is slowing down on rolling out its LTE network. Like when was the last time we heard of Sprint's LTE expansion?

22. cripton805

Posts: 1485; Member since: Mar 18, 2012

Yes. Their 3g is so bad in my area I cant even use it most of the time. Their pricing isnt even that great its within $10 of the Verizon plan I used to have. Except now with unlimited calling being the only difference at the time. We are now getting lag on calls and texts. Its getting worse. I live in Central Coast CA. Near Santa Barbara. I shouldnt be getting these speeds in a place like this when Im not in the mountains and away from populations like LA.

27. nnjerzy

Posts: 126; Member since: Jun 19, 2013

I totally agree tmobile is much better

2. Mxyzptlk unregistered

Unlimited data + the world's greatest smartphone should be instant success for Sprint. But they need to update their network.

5. PapaSmurf

Posts: 10457; Member since: May 14, 2012

All the iPhone did to Sprint was put it further into debt and slow down their network dramatically.

6. Mxyzptlk unregistered

That's not Apple's fault. Sprint had the opportunity to upgrade their existing infrastructure but instead they went with 4G WiMAX in a hurry to be the first carrier with 4G. Now it's costing them even more. If Sprint had not have gotten the iPhone they would have been bleeding customers left and right.

15. apocalypsebc

Posts: 148; Member since: Dec 07, 2010

PapaSmurf never said it was Apple fault. I do agree with you on the fact that Sprint rushed to get 4G WIMAX just to be the first to have 4G, but Sprint also made a mistake in the deal with Apple. T-Mobiles deal with Apple came at the right time and they took their time getting the Iphone. Even the carriers in China are taking their time getting the Iphone and that's where the Iphone is Manufactured. Sprint could have done some things differently that could have been a lot better for them at this point in time. Things seem to be looking better in Sprints future now. Once this debt is taking care of and Sprint focuses on making smarter decisions, they could possibly give Verizon and AT&T some real threat and competition.

17. Daftama

Posts: 639; Member since: Nov 03, 2012

Five sprint some time in about 3-4 years sprint will have one of the best service out there... Yea they never made a smart decision in the career of sprint but look at them they are still number 3 lol.. Not that soft bank is in it will be a lot different just time thats all.. And when convert the Nextel towers it will improve service

21. Fallout09

Posts: 421; Member since: Oct 17, 2011

Wrong..... Why cant people seem to understand that Sprint was in a "Use It Or Lose It" situation for some of their bandwidth. Essentially WiMax was ready.... LTE was not.

19. SellPhones82

Posts: 569; Member since: Dec 11, 2008

Yep, their deal with the devil is going to cost them in the end. Even Verizon may owe Apple around $14 BILLION for not selling enough iPhones (they have to sell $23.5 billion worth of iPhones this year—more than double what it sold in 2012). T-Mobile was smart to hold off on their deal with Apple until Apple needed them more than they needed Apple. As market share fell so did the amount of $ Apple was requesting for their iconic phone. Plus since only the iPhone 5 has LTE all the 4 and 4S are sucking the life out of the old EVDO network.

26. a_merryman

Posts: 749; Member since: Dec 14, 2011

Really? Because all data so far indicates that Sprint is well on it's way to meeting the terms of the deal and thus owing Apple nothing.

28. downphoenix

Posts: 3165; Member since: Jun 19, 2010

that may be true, but the iphone was a big hit to the network, so they may meet their sales target, but good luck on retention.

8. MorePhonesThanNeeded

Posts: 645; Member since: Oct 23, 2011

What smartphone is that? Nearly none of the smartphones out are actually smart. Still can't power down at appointed times, nor charge at set times or do anything remotely smart aside from being a portable PC...that isn't smart since there isn't anything smart that it does of it's own accord. I wonder who coined that term anyway? Closest thing to a smartphone is the Moto X which actually does something that seems smart, it listens for your voice to give it instructions and all without killing your battery. We really should come up with a new word for smartphones, I have yet to come across anything remotely smart about any of them. Perhaps PC Phone as that more accurately describes them, smart phone....not so much. Lol.

11. a_merryman

Posts: 749; Member since: Dec 14, 2011

Ok Newt.

3. ajac09

Posts: 1482; Member since: Sep 30, 2009

Sprint REALLY needs to work on there network. Added a line to test them out again and god its still horrible.

4. moslondon

Posts: 40; Member since: Mar 07, 2013

well here in texas around houston my average speed is between 20-30 down and 8 up

10. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

Right!! And JayZee is the new Michael Jackson.

25. miles16852

Posts: 241; Member since: Oct 20, 2011

lol, and your the idiot,, I get the same DL and UL speeds here in Maryland,,

12. a_merryman

Posts: 749; Member since: Dec 14, 2011

Same for me in the DC area, and the LTE coverage is getting better every week. Can't wait for them to turn on LTE over 800 and 2500.

7. ngo2dd

Posts: 896; Member since: Jul 08, 2011

A lot of people cry about how slow they are but depend on your location.

16. moslondon

Posts: 40; Member since: Mar 07, 2013

Right.... The 3g network is really slow but the 4g is getting better i used to have less than 10down and now i have more than 20down in the same area

23. cripton805

Posts: 1485; Member since: Mar 18, 2012

Yeah. I usually get... about .001 down or less on 3g.

24. DonkeySauce

Posts: 194; Member since: Dec 03, 2011

I get about a 0.3 down if it doesn't time out.

9. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

Maxwell!!! Typo' second paragraph: "dept" [accumulated] … BTW, any idea if they plan on taking care of Mary, too?

13. techaman unregistered

its called having the worst service ever full bars and lte i get 7.5 speed normal 4g is about 3 and still sometimes never gos so f it i am leaving after july when contract is up.

14. JMartin22

Posts: 2324; Member since: Apr 30, 2013

I lol at the people that call the iPhone the world's best phone lol. You're paying for a low-tier midranger at best.

18. Mr.Mr.Upgrade

Posts: 474; Member since: Aug 30, 2011

Lol... IPhone better innovate September 10.. Are we crown them to be the next blackberry

20. thedarkside

Posts: 654; Member since: Apr 30, 2012

too little, too late

29. Steve2121

Posts: 2; Member since: Sep 04, 2013

Doesnt surprise me that sprint is still struggling. Just imagine how much debt they will be in when they eventually shut down WiMax. Haha not smart at all. They rushed to 4g and now they are even further behind. T-Mobile LTE is so my much faster in the suburbs of philly then crappy sprints.

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