Clearwire: $1.1 Billion Debt Offering, Possibly With More Funding To Come


Credit: Clearwire

One day after Verizon announced details of its LTE network, its WiMax competitor Clearwire (NSDQ: CLWR) cleared up a little of the funding cloud that has been hanging over it of late. It looks like, for now, Sprint (NYSE: S) won’t be stepping in to make up Clearwire’s funding shortfall, as the wireless provider announced plans to raise $1.1 in a debt offering.

In an announced today, Clearwire laid out its intention to raise at least $1.1 billion in a debt offering in the following tranches: $175 million first-priority senior secured notes due 2015; $500 million of second-priority secured notes due 2017; and $500 million of exchangeable notes due 2040. The initial purchasers of the exchangeable notes will also get an option to purchase up to an additional $100 million of exchangeable notes.

Clearwire says it may also issue an additional $584.6 million in exchangeable notes, pending shareholders decisions.

Important to note that, given that it might take at least $3 billion to build out the rest of Clearwire’s national coverage, this is very likely not the end of the funding story for the company.

In addition to this debt, Clearwire will “continue to pursue potential equity investments from our significant investors, potential equity investments from new investors and a potential sale of excess spectrum,” says a spokesperson. (via RCR)

Clearwire currently covers 68 markets with its service, but speeds for its WiMax-based network will typically run slower than those for Verizon’s LTE network, at 3-6 megabits per second compared to 5-12 mbps for the downlink.

While Verizon today added details about its non-contract pricing for LTE (same price but with an unsubsidised modem), Clearwire launched a WiFi product to enable home and office networking with its network. Data prices start at $35, while the modem costs $120.

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