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U.S. mobile operator does another sale and leaseback in a bid to generate fresh capital.
Sprint this week raised $3.5 billion (€3.2 billion) from yet another sale and leaseback deal, this time using a portion of its spectrum as collateral.
The U.S. mobile operator is selling a chunk of 2.5-GHz and 1.9-GHz spectrum to three wholly-owned, special purpose subsidiaries that will issue three spectrum-backed notes in a private placement.
Sprint will then sign a long-term lease agreement for the spectrum, with the rental fee contributing towards the debt repayments.
The spectrum involved in the complex transaction represents approximately 14% of the company’s total holdings. It is used by around 77% of Sprint’s 2.5-GHz enabled sites, and around 33% of its 1.9-GHz sites.
According to an independent valuation, the spectrum is worth some $16.4 billion.
The agreement is expected to close in November, and is the latest in a string of sale and leaseback deals designed to give Sprint access to fresh sources of capital.
In April, the company agreed to sell and lease back certain network assets in a deal that raised $2.2 billion.
Sprint employed a similar tactic in November 2015 when it raised $1.1 billion from the sale and leaseback of high-end smartphones.
