US Cellular has sold US$300m of senior notes due 1 December 2064, potentially to fund spectrum purchases.The carrier has recently completed its LTE rollout, aims to grow its broadband, IPTV and cable footprints and remains open to acquisitions in cable.
The Chicago-based company, 84% owned by Telephone and Data Systems (NYSE:TDS), said in a statement that the notes carry a coupon of 7.25% and are callable at par on and after 1 December.
Proceeds will be used for general corporate purposes as well as potential spectrum purchases. The carrier, which claims to serve 4.8 million customers in 23 states, completed its LTE rollout in Q3 this year.
BofA Merrill Lynch, Morgan Stanley, RBC Capital Markets, Wells Fargo and UBS were joint bookrunning managers. Citigroup was lead manager and co-managers were BNY Mellon, Comerica Securities, TD Securities, US Bancorp Investments and Drexel Hamilton. The underwriters were Drexel Hamilton and Samuel A Ramirez & Company.
Settlement is set for 23 November, subject to customary conditions, and the notes are expected to be submitted for trading on the New York Stock Exchange under the symbol UZC 30 days afterwards.
Moody’s, Standard & Poor’s and Fitch have rated the notes Ba1, BB and B+ respectively.
On 1 May, US Cellular filed a prospectus with the Securities and Exchange Commission registering up to US$500m of debt securities to be offered in future.
The Federal Communications Commission’s incentive spectrum auction is set to take place in Q1 next year although some believe it may be delayed.
US Cellular reported total operating revenues of US$1.07bn for Q3 2015, up from US$1bn in the third quarter of 2014. However, it cut its guidance for full year revenues to US$4bn from US$4.1bn. EBITDA for the quarter stood at US$208m. In its Q3 results presentation, the company said its priorities for 2015 include expanding in broadband, IPTV and cable and that it remains open to acquisitions in the latter.
