Nokia seeks $980M from bonds, releases low-end Lumia 510

Nokia (NYSE:NOK) wants to raise $980 million in a bond offering aimed at bolstering its balance sheet as it enters a critical phase of its turnaround in selling phones running Microsoft's (NASDAQ:MSFT) Windows Phone platform.

The Finnish handset giant said it intends to make an offering of senior unsecured bonds due in 2017 convertible into ordinary Nokia shares. Nokia said it will use the funds to "prudently manage its capital structure, proactively address upcoming debt maturities while preserving existing pools of liquidity and for general corporate purposes."

The announcement comes shortly after Nokia reported its sixth-straight quarterly loss amid declining smartphone sales. Nokia is going to start selling, through its carrier partners, its latest Lumia smartphones running Windows Phone 8. Sales of the gadgets will be a critical barometer of the company's ability to gain more traction in the market.

The bond issue also comes as Nokia thinks about its medium-term finances. Its credit ratings have been downgraded to junk status as its cash balance dropped to around $4.66 billion at the end of September from $5.44 billion at the end of June. Additionally, Nokia has a $1.62 billion bond due to mature in February 2014, and its Nokia Siemens Networks venture has a €972 million term loan due in June 2013.

Meanwhile, Nokia unveiled the Lumia 510, the latest in its Windows Phone line and a clear sign that Nokia wants to takes its Windows Phone devices to emerging markets. The gadget will sport a 4-inch screen, 800 MHz Qualcomm (NASDAQ:QCOM) Snapdragon processor, 5-megapixel camera and 256 MB of RAM. The phone features Nokia's Maps, Drive and Transport services. Nokia said the Lumia 510 will retail for around $199, excluding taxes and subsidies, and will be available starting in November in India and China, and followed closely by other countries in Asia-Pacific and South America.

Earlier this year Nokia released the Lumia 610 aimed at emerging markets.

For more:
- see this release
- see this WSJ article (sub. req.)
- see this Reuters article
- see this Bloomberg article
- see this Engadget article

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