US number-three Sprint Nextel has launched a US$1.5 billion bond offering aimed at raising funds to refinance debt, continue its network modernisation programme, and support its wholesale affiliate Clearwire.

The 7 percent notes will last for eight years, maturing in 2020. The sale of the notes is expected to close on 14 August. Moody’s Investors Service ranked the bonds B3, six levels below investment grade, the ratings company said yesterday.

In its latest financial quarter, Sprint reported a better-then-expected 6 percent year-on-year rise in sales to US$8.8 billion, but its net loss widened to US$1.37 billion for the period as the firm continued to invest heavily in upgrading its networks.

Sprint is investing in LTE, while at the same time supporting WiMAX partner Clearwire, which is also planning its own move to LTE. Sprint has just under a 50 percent share in Clearwire, making it its largest shareholder. 

The operator’s wireless service revenue increased in Q2, on the back of a rise in lucrative contract customers. The company said it sold 1.5 million iPhones during the period, with 40 percent going to new contract customers.