T-Mobile US to raise $2 billion ahead of 600MHz spectrum
08 March 2016 | Jason McGee-Abe
T-Mobile US has agreed with Deutsche Telekom to sell $2 billion in senior notes to its parent company to acquire low-band spectrums.
The news comes ahead of the FCC’s 600MHz incentive auction, which starts on March 29, 2016. The operator filed an SEC document on March 6, 2016, which states that the proceeds from the sale must primarily be used to acquire low-band spectrums.
“The Company is required to use the proceeds from the sale of the Notes (1) for acquisitions of low-band spectrum, (2) if the proceeds are not needed for acquisitions of low-band spectrum, for refinancing of debt (other than certain debt held by DT) and (3) if the proceeds are not needed for acquisitions of low-band spectrum or refinancing of debt, for general corporate purposes,” stated the SEC filing of the purchase agreement.
Deutsche Telekom declined to comment about the upcoming frequency auction as all participants have been asked not to make any statements about it ahead of March 29.
At the Deutsche Bank Leveraged Finance Conference in September 2015, T-Mobile’s CFO, Braxton Carter, was reported to have said that he didn’t think the auction would cost the company more than $1.5 billion, but would be prepared to spend up to $10 billion if necessary.
The SEC filing states that the sale of the notes “shall not be later than December 7, 2016” and will mature on March 15, 2021. The notes will have a coupon of 5.3%.
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