Topics:

T-Mobile could raise $2B for incentive auction

Tools

T-Mobile (NYSE:TMUS) may sell $2 billion in senior notes to parent company Deutsche Telekom to fatten its bankroll in advance of the upcoming FCC incentive auction of 600 MHz, Reuters reported.

The nation's third-largest mobile operator filed an SEC document saying it can issue the notes through November of this year. The notes will mature in 2021 and have a 5.3 percent coupon, Reuters said, and proceeds from their sale must be used to acquire spectrum or for debt refinancing "and general corporate purposes."

T-Mobile is widely expected to be an active participant in the auction of TV broadcasters' spectrum, and CFO Braxton Carter said several months ago that the carrier could spend as much as $10 billion on the airwaves. However, he has also said he didn't believe T-Mobile would need to spend that much to obtain the spectrum it wants.

The FCC later this month will start a reverse auction, taking the first steps toward buying spectrum back from TV broadcasters. After an unpacking period during which the broadcast TV channels are reassigned to free up spectrum for other uses, those airwaves will be bid on during the forward auction. The entire process is expected to last several months.

Deutsche Telekom said last week it had shelved efforts to sell T-Mobile to focus on the auction in a move that could give potential buyers of T-Mobile time to wait for a more favorable political climate for telecom consolidation. Deutsche Telekom has long wanted to spin off its U.S. operator but hasn't been able to close a deal; both Sprint and AT&T have failed in their efforts to conduct a transaction with T-Mobile.

For more:
- see this Reuters report

Related articles:
Report: Deutsche Telekom shelves sale of T-Mobile as incentive auction approaches
T-Mobile seen as favorite to win spectrum in 600 MHz auction, but smaller carriers likely to jump in as well
Evercore: T-Mobile to post growth in subscribers and earnings in Q4
Sprint, T-Mobile could combine network assets into a new company, analysts argue