A T-Mobile store in New York.
T-Mobile USA Inc. sold $2.8 billion of bonds through its operating subsidiary today, among six borrowers tapping the U.S. investment-grade market. The longest-tenored tranche of the three-part deal, a 30-year bond, yields 0.98 percentage point above Treasuries, according to a person with knowledge of the matter. Initial price talk was a spread of as much as 1.3 percentage point. Proceeds will be used for debt refinancing and general corporate purposes, said the person, who asked not to be identified disclosing private details.
The wireless carrier is facing $30 billion in possible spending from mid-2025 through the end of 2026—$7 billion for mergers and acquisitions, $6 billion in dividends, and $17 billion of potential share repurchases—according to Stephen Flynn, senior credit analyst at Bloomberg Intelligence.
T-Mobile said last week that subsidiary Sprint LLC will redeem its $1.5 billion 7.625 percent note on November 1, four months before maturity.
“Though T-Mobile US has cash on hand and produces ample free cash flow, it makes sense for the company to sell bonds to refinance debt given its spending plans,” Flynn wrote in a note Monday.
T-Mobile’s offering comes as the U.S. credit backdrop remains favorable, with investment-grade spreads just above their lowest levels in decades.
Barclays Plc, Citigroup Inc., Goldman Sachs Group Inc., and Wells Fargo & Co. managed the bond sale.
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