Verizon Launches $25 Billion Bond Sale to Pay for 5G Spectrum
12 March 2021 - 8:35AM
Dow Jones News
By Nina Trentmann
Verizon Communications Inc. is raising $25 billion in new debt
to help the cellphone carrier settle a bill for spectrum licenses
coming due this month.
The telecommunications company in February won more than half of
the wireless airwaves offered in a U.S. government auction and
pledged $45.5 billion for them, plus roughly $8 billion in
additional clearing payments to help existing license users move to
other bands. The new spectrum rights could help Verizon expand the
reach and bandwidth of its fifth-generation wireless offering.
Verizon paid a first installment of $8.2 billion to the Federal
Communications Commission on Wednesday, and will use the proceeds
of the latest bond sale to pay the roughly $36.4 billion owed to
the FCC by March 24, Chief Financial Officer Matthew Ellis
said.
Verizon, the country's largest carrier in terms of subscribers,
theoretically has enough funds to pay the FCC even without the bond
sale. The company in late February agreed to a $25 billion
term-loan facility with a consortium of banks that it can draw down
on if needed, Mr. Ellis said. Verizon also has some money left from
a $12 billion bond sale in November and could use those funds for
the second payment to the FCC, Mr. Ellis said.
The company held $22.2 billion in cash on the balance sheet at
the end of December, plus an undrawn credit facility of $9.4
billion, according to ratings company Fitch Ratings.
On top of the nearly $54 billion for 5G licenses and related
items, Verizon told investors Wednesday that it plans a total of
$10 billion in capital expenditures for expanding its midband, or
C-band, range over the next three years, a swath of airwaves that
previously were restricted to satellite communications.
(MORE TO COME)
Drew FitzGerald contributed to this article
Write to Nina Trentmann at nina.trentmann@wsj.com
(END) Dow Jones Newswires
March 11, 2021 16:20 ET (21:20 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
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