Sprint launched a second batch of spectrum-backed bonds this week, seeking to raise up to an additional $3.9 billion in cash.
The operator indicated the latest tranche is part of a $7 billion spectrum leaseback deal it launched in October 2016. As part of the arrangement, Sprint is using a portfolio of its 2.5GHz and 1.9GHz spectrum licences as collateral for repayment of the bonds. The airwaves make up around 14 per cent of Sprint’s total spectrum holdings.
Sprint’s decision to offer another batch of bonds doesn’t come as a surprise: in December 2017, former Sprint CFO Tarek Robbiati said another tranche would hit the market in the first half of 2018. He noted the original offering was ten-times oversubscribed and said a third bond issue could come later this year if necessary.
The push to secure additional cash comes as Sprint moves ahead with plans to invest between $5 billion and $6 billion to strengthen its network this year. Before his departure, Robbiati said the spending could cause Sprint to dip into negative cash flow territory, but expressed confidence the operator would be able to fund its plan using its unique financing strategies.
More job cuts
Sprint also continued its cost cutting efforts, this time with the elimination of around 500 positions at its Kansas headquarters. The Kansas City Business Journal reported the cuts are aimed at removing redundant roles, but won’t impact customer-facing segments including retail or customer care.
Earlier this year, Sprint CEO Marcelo Claure revealed plans to streamline its executive positions to get “better operational effectiveness”, but didn’t say how many jobs would be impacted.