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Clearwire Plans To Sell Debt

Clearwire Plans To Sell Debt - Clearwire Corp (CLWR.O) plans to sell more than $1.1 billion in debt after months of negotiations to stave off a looming funding gap as it spends billions on building a new wireless network.

But its shares fell 6.6 percent after the news as some investors worried about the cost of the debt, while others were disappointed the wireless service provider, majority owned by Sprint Nextel Corp (S.N), had not been able to raise more.

"It's only $1 billion, and in view of the other options this is likely one of the higher-cost of capital options," Mizuho Securities analyst Michael Nelson said.

Sprint shares rose 5 percent as investors saw the offering as a sign that the No. 3 U.S. mobile provider would not need to raise its investment in Clearwire -- at least for now.

The news was more mixed for Clearwire investors, some of whom were hoping for a lower-cost solution, like an equity investment.

Clearwire had also considered raising funding from other sources including another investment from Sprint or from T-Mobile USA, a unit of Deutsche Telekom AG (DTEGn.DE), which would in turn rent network space at a favorable rate.

It also looked at the option of selling wireless spectrum. The company did not say in its statement on Thursday if those other options were still in the cards.

Clearwire Plans To Sell Debt
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