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Sprint sells $2.28B in bonds to refinance debt load

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Sprint Nextel (NYSE:S) said it sold $2.28 billion worth of 10-year bonds to retire Nextel debt due in 2014 and 2015, the latest effort by Sprint to clean up its balance sheet as it hopes to embark on a run toward profitability.

Sprint has $20.5 billion in bonds and term loans. The carrier returned to the debt market after issuing in August $1.5 billion in bonds due in 2020. Sprint said that after it retires the 2014 and 2015 Nextel debt it will have no more Nextel debt due in 2014 or 2015 left outstanding. 

In recent weeks Sprint CFO Joe Eueteneuer has talked about the importance of clearing up Sprint's balance sheet, improving liquidity and boosting its cash position.

The refinancing of the debt comes amid Softbank's planned $20.1 billion investment in Sprint, which will see the Japanese carrier taking control of 70 percent of Sprint. Under the terms of the deal, $12.1 billion will be distributed to Sprint shareholders and Softbank will pump $8 billion of new capital to Sprint. The deal is expected to significantly strengthen Sprint's hand financially to either make acquisitions or pursue its own network expansion.

Sprint CEO Dan Hesse has said he thinks the company is on track to turn a profit in 2014 after seven years of losses. In an interview with Bloomberg this fall, Hesse said the company still has a long way to go, reiterating comments he has made on earnings calls and at investor conferences. Still, he said Sprint will see profit-margin expansion and earnings growth in 2014.

The nation's No. 3 carrier is in the middle of its multi-year, $10 billion to $11 billion Network Vision network modernization plan and is also on the hook for a four-year, $15.5 billion commitment to Apple (NASDAQ:AAPL) to sell the iPhone. Those costs have weighed heavily on both Sprint and investors, though Hesse has noted repeatedly that both are essentially long-term investments for the company.

For more:
- see this release
- see this separate release
- see this Bloomberg article

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