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Moody's Reviews Clearwire's Ratings for Upgrade
Published on:
Moody's Investors Service has placed all Clearwire debt ratings on review for upgrade following the announcement that it has entered into a definitive agreement with Sprint Nextel that contemplates Sprint acquiring the approximately 50% of Clearwire's shares that it does not currently own for $2.97 per share.
Clearwire's existing shareholders will receive an aggregate of $2.2 billion in cash for their shareholdings and Clearwire will become a wholly-owned subsidiary of Sprint.
The transaction is expected to close by mid-2013, pending Clearwire shareholder approval, including a majority of Clearwire stockholders not affiliated with Sprint or Softbank, regulatory approvals and Sprint's previously announced transaction with SoftBank (Sprint's ratings remain on review for upgrade).
In the interim, despite an $80 million per month liquidity injection from Sprint that begins in January and continues for 10 months, Moody's says that it sees Clearwire's circumstance as largely unchanged and have, therefore, left all ratings at their prevailing levels.
In addition to uncertainties concerning appovals, it is not yet known how Sprint plans to operationally integrate Clearwire are or whether Clearwire's debt will be reconfigured. Consequently, Moody's review will focus on Sprint's operational and financial plans for Clearwire following the deal's close.
Tags: [clearwire] [sprint nextel] [USA]
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