Tags: Sprint | Junk | Bond | Offering

Sprint Raises $6.5 Billion in Biggest Junk-Bond Offering Since '08

Sprint Corp. raised $6.5 billion Wednesday in the biggest high-yield offering since 2008, as sales of speculative-grade securities surpass last year’s record pace.

Sprint’s $4.25 billion of 7.875 percent, 10-year notes priced to yield 498 basis points more than similar-maturity Treasuries and its $2.25 billion of 7.25 percent, eight-year debt pays a spread of 466 basis points, according to data compiled by Bloomberg. A basis point is 0.01 percentage point.

Proceeds from the issue by the third-largest U.S wireless carrier will be used for general corporate purposes, Bloomberg data show. The securities are rated B1 by Moody’s Investors Service, four levels below investment grade, and one step higher at BB- at Standard & Poor’s.

Sales of dollar-denominated junk-rated debt this year of $242.5 billion exceed the $202.9 billion sold in the corresponding period of 2012, Bloomberg data show. Borrowers issued a record $357.3 billion of high-yield debt last year.

The sale from the Overland Park, Kansas-based company is the largest high-yield offering since June 2008, when Intelsat priced $7.1 billion of bonds through three units, Bloomberg data show. Verizon Communications Inc. and AT&T Inc. own the two biggest U.S. wireless carriers.

Yields on the Bank of America Merrill Lynch U.S. High Yield index have declined to 6.86 percent as of yesterday from a record high 22.65 percent during the credit crisis in December 2008 and reached an unprecedented low of 5.98 percent on May 9.

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Sprint Corp. raised $6.5 billion Wednesday in the biggest high-yield offering since 2008, as sales of speculative-grade securities surpass last year's record pace.
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