T-Mobile Sells $19 Billion of Bonds to Finance Sprint Takeover
T-Mobile Receives More Than $30 Billion of Orders For Bond Sale
(Bloomberg) -- T-Mobile US Inc. sold $19 billion of bonds on Thursday to help finance its acquisition of Sprint Corp., in the second-biggest bond sale this year.
Investors placed about $75 billion of orders at the peak for the highly-anticipated bond offering, which started marketing nearly a year ago, according to people with knowledge of the matter. It’s been on the sidelines as the companies had to clear several regulatory hurdles to close the deal, which was further complicated by the Covid-19 pandemic.
T-Mobile formally completed its merger with Sprint Wednesday, and was quick to restart marketing for what it said could be a $10 billion bond sale soon after. The proceeds will help refinance a $19 billion bridge loan, likely eliminating the need to raise additional funds through bonds denominated in other currencies including euros.
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The mobile carrier sold investment-grade, senior secured bonds in five parts. The longest portion of the offering, a 30-year security, will yield 3.25 percentage points above Treasuries, after initially price talk around 3.75 percentage points, according to one of the people familiar, who asked not to be identified as the details are private.
The bond offering quickly gets T-Mobile’s banks out of the vast majority of the $23 billion of debt they had agreed to provide to help finance the merger. After the $19 billion bridge loan is repaid with proceeds from the bond sale, the lenders will keep on their books only a $4 billion seven year-term loan to be syndicated to institutional investors. The loan pays 3 percentage points over the benchmark Libor rate, according to a regulatory filing on Wednesday.
At $19 billion, T-Mobile’s sale is the second-largest this year. Oracle Corp. took the top spot for 2020 with a $20 billion offering Monday.
Barclays Plc, Deutsche Bank AG and Goldman Sachs Group Inc. are managing the bond sale, the person said.
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