The 600MHz spectrum auction is starting to get close, and T-Mobile just got a nice infusion of spending money.
An SEC filing has revealed that T-Mobile can sell $2 billion in senior notes to Deutsche Telekom. These notes can be issued until December 1, 2016, will mature on March 15, 2021, and have 5.3 percent coupon.
According to the SEC filing, the $2 billion that T-Mobile is intended to be used “for acquisitions of low-band spectrum,” like the 600MHz airwaves that’ll soon be put up for auction. If the money isn’t needed for low-band spectrum, it must be used for refinancing debt. And if it’s not needed for low-band spectrum or refinancing debt, it must be used for “general corporate purposes.”
T-Mobile has said that it could spend up to $10 billion during the upcoming 600MHz auction, but that it doesn’t think it’ll need more than $1 billion of $1.5 billion. Magenta plans to target 600MHz spectrum in areas where it currently has no 700MHz coverage, as well as major metro areas that do have 700MHz but could use some support. This deal with parent company Deutsche Telekom gives T-Mobile more cash to play with in the upcoming auction to get the airwaves that it really wants.