T-Mobile US (NYSE:TMUS) plans to issue and sell US$2bn of senior notes due 2021 to controlling shareholder Deutsche Telekom (ETR:DTE), primarily to acquire low-band spectrum. T-Mobile has previously said it may spend up to US$10bn at the FCC incentive auction of 600 MHz airwaves, set to begin later this month.
T-Mobile US (NYSE:TMUS) plans to issue and sell US$2bn of senior notes due 2021 to controlling shareholder Deutsche Telekom (ETR:DTE), primarily to acquire low-band spectrum.
The US’ third largest mobile operator said in an SEC filing that it has agreed to issue and sell, and Deutsche Telekom has agreed to buy, US$2bn of its 5.3% senior notes due 15 March 2021. T-Mobile can issue the notes until 1 December this year and the closing date will be no later than 7 December.
The company is required to use the proceeds to acquire low-band spectrum as a priority, or to refinance debt or for general corporate purposes.
The notes will bear annual interest of 5.3%, payable on a semi-annual basis and have substantially the same terms as T-Mobile’s existing senior notes.
They will be issued under an indenture dated 28 April 2013 with Deutsche Bank Trust Company Americas as trustee and a new, supplemental indenture.
T-Mobile has previously said it may spend up to US$10bn at the FCC incentive auction of 600 MHz airwaves, the ‘reverse’ portion of which is set to begin on 29 March and will see broadcasters sell spectrum to the FCC. These airwaves will then be sold to operators and potentially cable, tech and investment firms, in the ‘forward auction’.
T-Mobile revealed last month that it raised US$4bn in Q4 2015 to spend at the auction. It has already shelled out at least US$1.1bn on 700 MHz spectrum licences so far this year as it seeks to expand its 4G LTE network.
In its latest earnings presentation, the operator said it more than doubled its geographic 4G LTE footprint last year, extending its reach to 305 million people.
Rival mobile operators AT&T and Verizon Communications have also indicated their intention to take part in the auction as has cable giant Comcast. Satellite broadcaster Dish Network has said it may take part, while some tech and investment firms could also participate.
