This morning, beleaguered internet service provider Clearwire has confirmed plans to raise up to 1.1 billion in capital via debt securities sales after failing to secure additional outside investment in order to continue operations.
The breakdown of the sale consists of $175 million in first-priority senior secured notes due in 2015, $500 million of second-priority secured notes due in 2017 and $500 million of exchangeable notes due 2040 that will grant the initial purchasers of the exchangeable notes an option to purchase up to an additional $100.0 million of exchangeable notes. Clearwire intends to use the net proceeds from the sale for working capital and for general corporate purposes, including capital expenditures.
Clearwire is currently under a self-imposed conservation state, cutting back on retail and network expansion along with cutting costs on marketing, which is reflected in its recent offers to new customers of up to 80% off hardware and half off service.
