|By Business Wire||
|December 18, 2012 05:51 PM EST||
Fitch Ratings maintains the following ratings for Sprint Nextel Corporation (Sprint Nextel) and its subsidiaries on Rating Watch Positive:
--Issuer Default Rating (IDR) 'B+';
--Senior unsecured credit facility 'BB/RR2';
--Junior guaranteed unsecured notes 'BB/RR2';
--Senior unsecured notes 'B+/RR4'.
Sprint Capital Corporation
--Senior unsecured notes 'B+/RR4'.
Nextel Communications Inc. (Nextel)
Fitch has maintained the Rating Watch Positive after Sprint Nextel entered into a definitive agreement to acquire the approximate 50% stake in Clearwire Corp. it currently does not own for $2.2 billion. Sprint Nextel will also provide a loan of up to $800 million in interim financing in the form of exchangeable notes, which will be exchangeable under certain conditions for Clearwire class B common stock. Under the financing agreement, Sprint has agreed to purchase $80 million of exchangeable notes per month for up to 10 months beginning in January 2013. The transaction will require regulatory approval and a majority of non-Sprint owned Clearwire shares. The Clearwire acquisition, which is contingent on the Softbank transaction finalizing, is expected to close mid-2013 at approximately the same time as Softbank.
Fitch believes Clearwire's spectrum assets are integral to Sprint Nextel's long-term LTE plans by solving the need for high capacity spectrum in its urban cores. This strengthens Sprint's competitive position and ability to differentiate unlimited wireless broadband offerings from its national peers. As such, Fitch views this strategically as a positive event since the acquisition would give Sprint Nextel complete control of Clearwire's spectrum and allow Sprint to fully integrate Clearwire assets into its network. Thus the transaction eliminates future equity contributions, reduces inefficient operating expenses and facilitates the execution of its strategic plans.
From a credit profile perspective, pro forma leverage would increase to over 5x. Given the increase in leverage, the prospects for a ratings upgrade to 'BB-' once the two acquisitions close have potentially diminished. Sprint's execution on stated network objectives and whether the company can demonstrate further operational and financial improvements in the coming quarters despite the increased competitive intensity has elevated importance. Material uncertainty also still exists with Sprint's post-transaction capital structure plans and uses for Softbank's capital infusion which will be a key factor in the final rating decision.
Uncertainty exists whether non-Sprint Clearwire shareholders will approve the transaction. Fitch believes Clearwire's stand-alone prospects were bleak due to its constrained liquidity, limited access to new capital and inability to attract major new customers. Over time, as consolidation has removed potential wholesale partners and operators have become more efficient with spectrum assets through acquisition and swaps, the industry has obviated the need for a wholesale operator. Clearwire's lack of additional strategic agreements with other operators, limited market access and substantial funding gap left the company heavily reliant on Sprint Nextel for further funding.
Absent Clearwire shareholder approval, a financial restructuring of Clearwire is quite possible. This would have significant implications and risks for Clearwire's stakeholders with an uncertain outcome. In addition, a financial restructuring would introduce material uncertainty with Sprint's longer-term network and spectrum plans. Clearwire was expected to begin supplying Sprint with hotspot capacity for its LTE network beginning in mid-2013.
Fitch now views Sprint Nextel's liquidity as strong despite the significant cash requirements expected through at least 2013. In addition to the expected $8 billion from Softbank, Sprint Nextel's liquidity position is supported by $6.3 billion of cash and $1.2 billion borrowing capacity under its $2.2 billion revolving credit agreement at the end of the third quarter 2012. Fitch expects Sprint Nextel will consider parameters for a new facility in early 2013 given the October 2013 maturity. Approximately $423 million is also available through May 31, 2013 under the first tranche of the secured equipment credit facility. The incremental Softbank investment has afforded Sprint Nextel considerable financial flexibility to address refinancing requirements and strategic investments which the company has demonstrated in the past two months.
Sprint has significantly improved its maturity profile as a result of debt issuances in the past year and reduced refinancing risk in the midst of a capital intensive period. In mid-2011, Sprint had $8 billion in debt maturities during the next four years, including $2.3 billion in 2012, $1.8 billion in 2013, and $1.4 billion in 2014. For the third quarter 2012, pro forma for the November $2.3 billion debt issuance, Sprint has approximately $1 billion in debt maturities during the next three years including $317 million in 2013, $198 million in 2014 and $500 million in 2015.
WHAT COULD TRIGGER A RATING ACTION
Negative: The ratings are on a Rating Watch Positive. As a result, Fitch's sensitivities do not currently anticipate developments with a material likelihood, individually or collectively, of leading to a rating downgrade.
Positive: The ratings are on a Rating Watch Positive. Future developments that may, individually or collectively lead to positive rating action include:
--Completion of Softbank merger and expected uses for the $8 billion cash injection.
--Plans for post-close capital structure.
--The degree of operational, strategic, and legal linkage between Softbank and Sprint Nextel.
--Trends associated with operating performance for postpaid subscribers, churn, and ARPU.
--Sprint Nextel's continued progress with network modernization plans including cost improvements and LTE network deployment.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Corporate Rating Methodology' (Aug. 8, 2012);
--'Rating Global Telecom Companies: Sector Credit Factors' (Aug. 9, 2012).
Applicable Criteria and Related Research:
Corporate Rating Methodology
Rating Telecom Companies
SYS-CON Events announced today that Ciqada will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Ciqada™ makes it easy to connect your products to the Internet. By integrating key components - hardware, servers, dashboards, and mobile apps - into an easy-to-use, configurable system, your products can quickly and securely join the internet of things. With remote monitoring, control, and alert messaging capability, you will meet your customers' needs of tomorrow - today! Ciqada. Let your products take flight. For more inform...
Apr. 26, 2015 03:00 PM EDT Reads: 1,934
Health care systems across the globe are under enormous strain, as facilities reach capacity and costs continue to rise. M2M and the Internet of Things have the potential to transform the industry through connected health solutions that can make care more efficient while reducing costs. In fact, Vodafone's annual M2M Barometer Report forecasts M2M applications rising to 57 percent in health care and life sciences by 2016. Lively is one of Vodafone's health care partners, whose solutions enable older adults to live independent lives while staying connected to loved ones. M2M will continue to gr...
Apr. 26, 2015 03:00 PM EDT Reads: 1,535
SYS-CON Media announced today that @WebRTCSummit Blog, the largest WebRTC resource in the world, has been launched. @WebRTCSummit Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @WebRTCSummit Blog can be bookmarked ▸ Here @WebRTCSummit conference site can be bookmarked ▸ Here
Apr. 26, 2015 03:00 PM EDT Reads: 2,515
SYS-CON Events announced today that GENBAND, a leading developer of real time communications software solutions, has been named “Silver Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. The GENBAND team will be on hand to demonstrate their newest product, Kandy. Kandy is a communications Platform-as-a-Service (PaaS) that enables companies to seamlessly integrate more human communications into their Web and mobile applications - creating more engaging experiences for their customers and boosting collaboration and productiv...
Apr. 26, 2015 02:00 PM EDT Reads: 2,752
Dave will share his insights on how Internet of Things for Enterprises are transforming and making more productive and efficient operations and maintenance (O&M) procedures in the cleantech industry and beyond. Speaker Bio: Dave Landa is chief operating officer of Cybozu Corp (kintone US). Based in the San Francisco Bay Area, Dave has been on the forefront of the Cloud revolution driving strategic business development on the executive teams of multiple leading Software as a Services (SaaS) application providers dating back to 2004. Cybozu's kintone.com is a leading global BYOA (Build Your O...
Apr. 26, 2015 02:00 PM EDT Reads: 1,579
The best mobile applications are augmented by dedicated servers, the Internet and Cloud services. Mobile developers should focus on one thing: writing the next socially disruptive viral app. Thanks to the cloud, they can focus on the overall solution, not the underlying plumbing. From iOS to Android and Windows, developers can leverage cloud services to create a common cross-platform backend to persist user settings, app data, broadcast notifications, run jobs, etc. This session provides a high level technical overview of many cloud services available to mobile app developers, includi...
Apr. 26, 2015 02:00 PM EDT Reads: 1,429
SYS-CON Events announced today that BroadSoft, the leading global provider of Unified Communications and Collaboration (UCC) services to operators worldwide, has been named “Gold Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. BroadSoft is the leading provider of software and services that enable mobile, fixed-line and cable service providers to offer Unified Communications over their Internet Protocol networks. The Company’s core communications platform enables the delivery of a range of enterprise and consumer calling...
Apr. 26, 2015 01:30 PM EDT Reads: 2,562
While not quite mainstream yet, WebRTC is starting to gain ground with Carriers, Enterprises and Independent Software Vendors (ISV’s) alike. WebRTC makes it easy for developers to add audio and video communications into their applications by using Web browsers as their platform. But like any market, every customer engagement has unique requirements, as well as constraints. And of course, one size does not fit all. In her session at WebRTC Summit, Dr. Natasha Tamaskar, Vice President, Head of Cloud and Mobile Strategy at GENBAND, will explore what is needed to take a real time communications ...
Apr. 26, 2015 01:00 PM EDT Reads: 1,801
What exactly is a cognitive application? In her session at 16th Cloud Expo, Ashley Hathaway, Product Manager at IBM Watson, will look at the services being offered by the IBM Watson Developer Cloud and what that means for developers and Big Data. She'll explore how IBM Watson and its partnerships will continue to grow and help define what it means to be a cognitive service, as well as take a look at the offerings on Bluemix. She will also check out how Watson and the Alchemy API team up to offer disruptive APIs to developers.
Apr. 26, 2015 12:00 PM EDT Reads: 1,869
The IoT Bootcamp is coming to Cloud Expo | @ThingsExpo on June 9-10 at the Javits Center in New York. Instructor. Registration is now available at http://iotbootcamp.sys-con.com/ Instructor Janakiram MSV previously taught the famously successful Multi-Cloud Bootcamp at Cloud Expo | @ThingsExpo in November in Santa Clara. Now he is expanding the focus to Janakiram is the founder and CTO of Get Cloud Ready Consulting, a niche Cloud Migration and Cloud Operations firm that recently got acquired by Aditi Technologies. He is a Microsoft Regional Director for Hyderabad, India, and one of the f...
Apr. 26, 2015 12:00 PM EDT Reads: 1,678
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal today!
Apr. 26, 2015 12:00 PM EDT Reads: 2,329
WebRTC is an up-and-coming standard that enables real-time voice and video to be directly embedded into browsers making the browser a primary user interface for communications and collaboration. WebRTC runs in a number of browsers today and is currently supported in over a billion installed browsers globally, across a range of platform OS and devices. Today, organizations that choose to deploy WebRTC applications and use a host machine that supports audio through USB or Bluetooth can use Plantronics products to connect and transit or receive the audio associated with the WebRTC session.
Apr. 26, 2015 12:00 PM EDT Reads: 1,913
As enterprises move to all-IP networks and cloud-based applications, communications service providers (CSPs) – facing increased competition from over-the-top providers delivering content via the Internet and independently of CSPs – must be able to offer seamless cloud-based communication and collaboration solutions that can scale for small, midsize, and large enterprises, as well as public sector organizations, in order to keep and grow market share. The latest version of Oracle Communications Unified Communications Suite gives CSPs the capability to do just that. In addition, its integration ...
Apr. 26, 2015 11:30 AM EDT Reads: 4,429
SYS-CON Media announced today that @ThingsExpo Blog launched with 7,788 original stories. @ThingsExpo Blog offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. @ThingsExpo Blog can be bookmarked. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago.
Apr. 26, 2015 11:00 AM EDT Reads: 2,573
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on Twitter at @MicroservicesE
Apr. 26, 2015 11:00 AM EDT Reads: 2,117
SYS-CON Events announced today that robomq.io will exhibit at SYS-CON's @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. robomq.io is an interoperable and composable platform that connects any device to any application. It helps systems integrators and the solution providers build new and innovative products and service for industries requiring monitoring or intelligence from devices and sensors.
Apr. 26, 2015 11:00 AM EDT Reads: 2,105
Wearable technology was dominant at this year’s International Consumer Electronics Show (CES) , and MWC was no exception to this trend. New versions of favorites, such as the Samsung Gear (three new products were released: the Gear 2, the Gear 2 Neo and the Gear Fit), shared the limelight with new wearables like Pebble Time Steel (the new premium version of the company’s previously released smartwatch) and the LG Watch Urbane. The most dramatic difference at MWC was an emphasis on presenting wearables as fashion accessories and moving away from the original clunky technology associated with t...
Apr. 26, 2015 11:00 AM EDT Reads: 2,117
SYS-CON Events announced today that Litmus Automation will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Litmus Automation’s vision is to provide a solution for companies that are in a rush to embrace the disruptive Internet of Things technology and leverage it for real business challenges. Litmus Automation simplifies the complexity of connected devices applications with Loop, a secure and scalable cloud platform.
Apr. 26, 2015 11:00 AM EDT Reads: 1,758
In 2015, 4.9 billion connected "things" will be in use. By 2020, Gartner forecasts this amount to be 25 billion, a 410 percent increase in just five years. How will businesses handle this rapid growth of data? Hadoop will continue to improve its technology to meet business demands, by enabling businesses to access/analyze data in real time, when and where they need it. Cloudera's Chief Technologist, Eli Collins, will discuss how Big Data is keeping up with today's data demands and how in the future, data and analytics will be pervasive, embedded into every workflow, application and infra...
Apr. 26, 2015 11:00 AM EDT Reads: 1,478
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, will provide some practical insights on what, how and why when implementing "software-defined" in the datacenter.
Apr. 26, 2015 11:00 AM EDT Reads: 1,633