Standard & Poor's Places Clearwire (CLWR) on CreditWatch 'Positive'
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Standard & Poor's Ratings Services placed its 'CCC' corporate credit rating, and all other ratings, on Bellevue, Wash.-based wireless service provider Clearwire Corp. (Nasdaq: CLWR) on CreditWatch with positive implications.
The CreditWatch listing follows Sprint Nextel Corp.'s (NYSE: S) (B+/Watch Pos/--) offer to purchase the remaining 49% that it does not already own of Clearwire for
about $2.1 billion. It will provide about $800 million of interim financing, which will be used to fund operations and the build-out of Clearwire's Long-Term Evolution (LTE) network. Including Clearwire's debt, we believe the transaction is valued at around $6 billion.
"The CreditWatch listing reflects the possibility that we could raise the ratings if Sprint Nextel is successful in its bid to acquire the remaining stake in Clearwire," said Standard & Poor's credit analyst Allyn Arden. Sprint Nextel signed an agreement to sell a 70% stake in the company to Japan-based SoftBank Corp. (BBB/Watch Neg/--), which will include an $8 billion cash infusion. We believe an upgrade of Clearwire would likely be limited to one notch absent a guarantee of Clearwire's debt by Sprint Nextel.
The CreditWatch listing follows Sprint Nextel Corp.'s (NYSE: S) (B+/Watch Pos/--) offer to purchase the remaining 49% that it does not already own of Clearwire for
about $2.1 billion. It will provide about $800 million of interim financing, which will be used to fund operations and the build-out of Clearwire's Long-Term Evolution (LTE) network. Including Clearwire's debt, we believe the transaction is valued at around $6 billion.
"The CreditWatch listing reflects the possibility that we could raise the ratings if Sprint Nextel is successful in its bid to acquire the remaining stake in Clearwire," said Standard & Poor's credit analyst Allyn Arden. Sprint Nextel signed an agreement to sell a 70% stake in the company to Japan-based SoftBank Corp. (BBB/Watch Neg/--), which will include an $8 billion cash infusion. We believe an upgrade of Clearwire would likely be limited to one notch absent a guarantee of Clearwire's debt by Sprint Nextel.
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