Sprint has signed an agreement with Network LeaseCo for the sale and leaseback of some of its network assets. The deal involves Sprint using the leased-back assets as collateral to raise USD 2.2 billion in borrowing from its parent SoftBank and other external investors. The assets, which consist mainly of mobile tower equipment, have a book value of approximately USD 3 billion. The operation will bring down the company’s cost of capital to the mid-single digits. The carrier will pay back the proceeds in staggered payments through January 2018. For accounting purposes, Sprint will consolidate Network LeaseCo.
Sprint CFO Tarke Robbiati said, “This transaction is an important first step in addressing upcoming debt maturities and allows us to stay focused on our corporate transformation, which involves growing topline revenues and aggressively taking costs out of the business to improve operating cash flows.”
The operator said that it had USD 6 billion of total liquidity and another USD 600 million available under vendor financing agreement to buy 2.5 GHz network equipment at the end of 2015.
