In a continuance of a private placement offering the company first started back in October of 2016, Sprint has now revealed a further offering of up to just over $3.9 billion in wireless spectrum-backed notes. The offering – begun by three wholly-owned subsidiaries – will take place in two parts, with a different repayment date assigned to each. In total, around 14-percent of the company's spectrum is involved in the offering, specifically including 2.5GHz and 1.9GHz, and are nearly the same holdings offered in the earlier leased licensing agreement. However, the company will be leasing back the licenses for that spectrum and the notes themselves are expected to maintain their investment grade rating by Moody's and Fitch.
The offering effectively provides Sprint with liquid assets from the immediate sale of the licenses, without damaging its ability to use the spectrum for its mobile networks. This deal was started back in 2016 and the purpose of the extra funds has not been made clear. However, with consideration for network expansion plans the company has also announced, at least a portion of that will presumably be rolled back into its network rollouts. The company is expecting its capital expenditures to hit around $6 billion this year as it builds up more of its advanced LTE network in preparation for next-generation 5G implementations. The prior announcements from the company have pointed toward network improvement through the further installation of small cell sites and expanded use of MIMO technologies in order to bolster capacity by as much as ten-fold. Beyond that, the new network deployments should also help the company ramps up the overall speed of its network. In turn, the company believes it will be able to continue competing and maybe even to gain back some of the market share it previously lost to other carriers.
Of course, without more information from Sprint, it isn't really possible to guess at intentions with any degree of certainty. Details around these proceedings, due to their private nature, are ordinarily very slim. There has been no word on which companies are involved in the offering or which organizations own those. Moreover, there is a chance that the offering will not proceed as expected or be successfully completed. So it may be best to temper optimism with a healthy dose of skepticism until further notice.