T-Mobile US sells $2B in senior notes, assigning proceeds to potential spectrum deals
T-Mobile US boosted its cash pile ahead of what could be some strategic spectrum purchases for the nation’s No. 3 operator.
T-Mobile US announced this week it had agreed to sell $2 billion worth of 6.5% senior notes with a 2026 due date in a registered public offering. The placement, which is scheduled to close on Nov. 5, tapped Deutsche Bank Securities, Citigroup Global Markets, J.P. Morgan Securities, Barclays Capital and Goldman, Sachs & Co as joint book-running managers for the notes offering, with Credit Suisse Securities, Morgan Stanley & Co. and RBC Capital Markets brought on as co-managers.
The carrier said it plans to use proceeds from the offer for general corporate purposes, “which may include acquisition of additional spectrum. The note offering comes on the heels of T-Mobile US reporting $138 million in net income for the third quarter.
T-Mobile US CEO John Legere announced last week the carrier had recently reached “four additional agreements in principle” to purchase additional 700 MHz licenses covering 20 million pops, which would bolster its 700 MHz spectrum portfolio to a total of 210 million pops. The new agreements, while not yet complete, are said to include spectrum covering the markets of Phoenix, San Diego, Las Vegas and New Orleans, among others.
Legere had previously stated the carrier would be “very aggressive” in the Federal Communications Commission’s 600 MHz incentive auction currently scheduled to begin on March 29.
“Let’s be clear, we are showing up, we are going to be very aggressive, we do have the balance sheet and we’re preparing for it, and we will scoop up as much as humanly possible,” Legere said. “It will be the biggest mistake any of them ever made, if they don’t show up.”
T-Mobile US’ necessary level of aggressiveness remains in question as Sprint recently announced it would not be participating in the proceedings. Sprint was seen as a potential bidding rival for the 30 megahertz of spectrum set aside by regulators outside the reach of telecom operators that currently hold significant chunks of sub-1 GHz spectrum licenses.
T-Mobile US earlier this year committed just under $1.78 billion in the FCC’s AWS-3 auction for spectrum licenses in the 1.7/2.1 GHz band adjacent to its current AWS-1 spectrum holdings. The carrier could also be a player for AWS-3 licenses recently returned to the FCC by Dish Network and its designated entity bidding partners after they were denied auction bidding credits. T-Mobile US this week filed comments with the FCC stating Dish and its DE partners should be prevented from participating in the re-auctioning of those assets.
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