Sprint commences offer of up to $3.5B of wireless spectrum-backed notes
Sprint announced that three wholly owned special purpose subsidiaries have commenced an offer of up to $3.5B of wireless spectrum-backed notes in three series with varying maturities in a private transaction that is exempt from the registration requirements of the Securities Act of 1933. The Issuers' directly owned subsidiaries will acquire a portfolio of FCC licenses and a small number of third-party leased license agreements from subsidiaries of Sprint, which comprise a portion of Sprint's 2.5GHz and 1.9GHz spectrum holdings, representing approximately 14 percent of Sprint's total spectrum holdings on a MHz-pops basis. The Spectrum Portfolio is currently utilized by approximately 77% of all of Sprint's 2.5GHz enabled sites and approximately 33% of Sprint's 1.9GHz enabled sites. The Spectrum Portfolio will be leased back to Sprint Communications pursuant to a long-term lease agreement, the rental payments for which are sufficient to service the Notes. Based on an independent third-party valuation, the central value of the Spectrum Portfolio as of June 30, 2017, based on the various assumptions and limitations set forth in the valuation report, is approximately $16.4B. The Notes are being issued pursuant to a $7B program established for this structure, consisting of the initial issuance and potentially future issuances, subject to certain conditions. The Notes are expected to be rated investment grade by both Moody's and Fitch. The consummation of the Notes offering is subject to market and other conditions and is anticipated to close in early November 2016.