Sprint to Help Clearwire Again with Another $2 Billion
posted Sunday Mar 4, 2012 by Nicholas DiMeo
Just when I think it can't get any worse or stranger for Clearwire, Sprint steps in and adds some more life into this crazy money train we call a wireless network. On March 1st, Sprint sold $2 billion - not a typo - in notes to further aid Clearwire in refinancing, funding and to help with their network upgrades. They've now moved past the "helping too much" level and shot right to "might as well own the company" status.
These notes, totaling $2 billion, include notes due in 2017 at 9.125% interest and notes due in 2020 at 7% interest. This is on top of the $4 billion they put up in November to start Clearwire's recovery process. I suppose Sprint recognizes that they need to continue the upgrades for Clearwire, after LightSquared's problems with the FCC.
It could also have something to do with their abandonment of buying MetroPCS. We learned this week, after the rumors from last week, that the board decided not to acquire the company, as it would have cost up to $8 billion, including debt, which would have been way too much for Sprint to take on, especially with their stock price being around $2.50.
Perhaps all of this will make sense in the long run. Sprint has $6 billion+ tied up into Clearwire now. I hope they really don't decide to abandon them in 2014 as their network support and instead just move to their potential LTE network that Sprint is helping Clearwire build.