Analysts Think Nokia (NOK) Should Take Advantage of Debt Markets on NSN Deal
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If Nokia (NYSE: NOK) is going to do a little debt refinancing, not is the time to get it done.
So say investors backing the move by the Finnish mobile device giant.
Earlier this week, it was announced that Nokia would acquire Siemens' (NYSE: SI) stake in the companies Nokia Siemens Networks joint venture. In the deal, Nokia said it would borrow €1.2 billion and take a €500 million loan from Siemens, which it will repay one-year following close of the deal.
One ING analyst, speaking with Bloomberg, thinks Nokia should do a minimum of €500 million in refinancing, or more if possible.
Another analyst noted that Nokia will have an easier time tapping debt markets with full-control of NSN.
Market data had the cost to protect against Nokia not paying its debts with credit-default swaps slipped to 563 basis points on Tuesday, from 635 basis points last week.
Nokia currently has about €5.26 billion in debt, while NSN carries about €800 million. Roughly €1.26 billion of Nokia's debt will be maturing next February.
NSN ended Q1 with €1.5 billion of net cash. Cash generation for the first three-months of 2013 was €239 million, from €733 million in Q412 and €291 million in the same period last year.
Nokia is up 0.8 percent in early trading Wednesday.
So say investors backing the move by the Finnish mobile device giant.
Earlier this week, it was announced that Nokia would acquire Siemens' (NYSE: SI) stake in the companies Nokia Siemens Networks joint venture. In the deal, Nokia said it would borrow €1.2 billion and take a €500 million loan from Siemens, which it will repay one-year following close of the deal.
One ING analyst, speaking with Bloomberg, thinks Nokia should do a minimum of €500 million in refinancing, or more if possible.
Another analyst noted that Nokia will have an easier time tapping debt markets with full-control of NSN.
Market data had the cost to protect against Nokia not paying its debts with credit-default swaps slipped to 563 basis points on Tuesday, from 635 basis points last week.
Nokia currently has about €5.26 billion in debt, while NSN carries about €800 million. Roughly €1.26 billion of Nokia's debt will be maturing next February.
NSN ended Q1 with €1.5 billion of net cash. Cash generation for the first three-months of 2013 was €239 million, from €733 million in Q412 and €291 million in the same period last year.
Nokia is up 0.8 percent in early trading Wednesday.
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