Clearwire’s CFO John Butler said in last quarter’s earnings call that the company would close on a new line of financing soon.
So today’s announcement that it has closed its first tranche of a fully committed $1 billion loan is really no surprise.
The company said the loan will be fully funded on a delayed basis lasting about 45 days. The transaction was led by Morgan Stanley, Merrill Lynch, JP Morgan and Citigroup.
Clearwire said the proceeds will be used to refinance its existing debt and to expand the company’s money-losing operations.The Kirkland-based company is led by Craig McCaw, who is known for his fundraising capabilities, said
Clearwire added that by refinancing its existing debt, virtually all of Clearwire’s debt is extended to a five-year maturity.
“Clearwire is capitalizing on the momentum we have in the market place to drive down our cost of capital, extend our debt maturities, simplify our balance sheet and provide additional capital resources,” Butler said. “By opportunistically accessing the capital markets, we expanded our investor base and further strengthened the company’s balance sheet.”
The market, which has showed some concern over how the company was going to continue expanding at a fast rate, viewed the news as positive.
In afternoon trading, Clearwire’s stock jumped 94 cents, or about 3.78 percent to $25.80 a share. That puts it above it’s IPO price of $25.