T-Mobile Agrees to Sell $2.5 Billion of Senior Notes

Rhea-AI Summary

T-Mobile US, Inc. (NASDAQ: TMUS) announced that its subsidiary, T-Mobile USA, Inc., has agreed to sell $2.5 billion in senior notes through a registered public offering. The offering includes:

• $700 million of 4.200% Senior Notes due 2029
• $900 million of 4.700% Senior Notes due 2035
• $900 million of 5.250% Senior Notes due 2055

The offering is expected to close on September 26, 2024. T-Mobile USA plans to use the net proceeds for general corporate purposes, which may include share repurchases, dividends, and refinancing existing debt. The offering is being managed by a group of prominent financial institutions acting as joint book-running managers and co-managers.

Positive

• Raising $2.5 billion through senior notes offering
• Potential for share repurchases and dividends
• Opportunity to refinance existing indebtedness

Negative

• Increase in long-term debt obligations
• Higher interest expenses due to new notes

Insights

Financial Analyst

T-Mobile's $2.5 billion senior notes offering is a significant financial move that provides the company with additional liquidity and flexibility. The notes are split into three tranches with maturities ranging from 2029 to 2055, allowing T-Mobile to stagger its debt obligations. The 4.200%, 4.700% and 5.250% interest rates are relatively attractive in the current market environment.

The intended use of proceeds for general corporate purposes, including potential share repurchases and dividends, signals confidence in the company's financial position. This could be viewed positively by investors as it may enhance shareholder value. However, the option to refinance existing debt suggests T-Mobile is also focused on managing its balance sheet effectively.

The involvement of numerous prominent financial institutions as joint book-running managers indicates strong market interest in T-Mobile's debt offering. This successful raise strengthens T-Mobile's financial position in the competitive telecom industry, potentially providing resources for network expansion and technological investments.

Market Research Analyst

This debt offering by T-Mobile demonstrates the company's ability to access capital markets on favorable terms, which is important in the capital-intensive telecom sector. The long-term nature of the notes (up to 2055) suggests T-Mobile is planning for sustained growth and market presence.

The timing of this offering is noteworthy, as it comes amidst a period of intense competition in the 5G space. By securing additional funding, T-Mobile positions itself to continue investing in network infrastructure and potentially outpace competitors in service quality and coverage.

Investors should consider how this additional $2.5 billion might impact T-Mobile's market strategy, particularly in areas like:

• 5G network expansion
• Customer acquisition efforts
• Potential M&A activities

The flexibility to use funds for share repurchases or dividends also indicates T-Mobile's commitment to shareholder returns, which could make the stock more attractive to value-oriented investors.

BELLEVUE, Wash.--(BUSINESS WIRE)-- T-Mobile US, Inc. (NASDAQ: TMUS) (“T-Mobile”) announced today that T-Mobile USA, Inc., its direct wholly-owned subsidiary (“T-Mobile USA” or the “Issuer”), has agreed to sell $700,000,000 aggregate principal amount of its 4.200% Senior Notes due 2029 (the “2029 Notes”), $900,000,000 aggregate principal amount of its 4.700% Senior Notes due 2035 (the “2035 Notes”) and $900,000,000 aggregate principal amount of its 5.250% Senior Notes due 2055 (the “2055 Notes,” and collectively with the 2029 Notes and the 2035 Notes, the “notes”) in a registered public offering.

The offering of the notes is scheduled to close on September 26, 2024, subject to satisfaction of customary closing conditions. T-Mobile USA intends to use the net proceeds from the offering for general corporate purposes, which may include among other things, share repurchases, any dividends declared by T-Mobile’s Board of Directors and refinancing of existing indebtedness on an ongoing basis.

J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Wells Fargo Securities, LLC, Barclays Capital Inc., BNP Paribas Securities Corp., Citigroup Global Markets Inc., Commerz Markets LLC, Credit Agricole Securities (USA) Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc., Santander US Capital Markets LLC, SG Americas Securities, LLC, SMBC Nikko Securities America, Inc., TD Securities (USA) LLC, Truist Securities, Inc., U.S. Bancorp Investments, Inc. and UBS Securities LLC are the joint book-running managers for the offering of the notes. ING Financial Markets LLC, NatWest Markets Securities Inc., PNC Capital Markets LLC, Scotia Capital (USA) Inc., Academy Securities, Inc. and American Veterans Group, PBC are acting as co-managers.

The Issuer has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (“SEC”) for the offering of notes to which this communication relates. Before you invest, you should read the prospectus in that registration statement and the related prospectus supplement and other documents the Issuer has filed with the SEC for more complete information about the Issuer and the offering of notes. You may get these documents for free by visiting EDGAR on the SEC Web site at http://www.sec.gov. Alternatively, the Issuer, any underwriter or any dealer participating in the notes offering will arrange to send you the prospectus and related prospectus supplement if you request it by contacting J.P. Morgan Securities LLC, 383 Madison Avenue, New York, New York 10179, Attention: Investment Grade Syndicate Desk, 3rd Floor, by telephone (collect) at 1-212-834-4533; Morgan Stanley & Co. LLC, 180 Varick Street, 2nd Floor, New York, NY 10014, by telephone at +1 (866) 718-1649 or by email at Prospectus@morganstanley.com; RBC Capital Markets, LLC, 200 Vesey Street, 8th Floor, New York, NY 10281, by telephone at +1 (866) 375-6829 or by email at rbcnyfixedincomeprospectus@rbccm.com; and Wells Fargo Securities, LLC, 608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402, by telephone at +1 (800) 645-3751 or by email at wfscustomerservice@wellsfargo.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the notes, the related guarantees or any other securities, nor shall it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements that are based on T-Mobile management’s current expectations. Such statements include, without limitation, statements about the expected closing of the offering of the notes and statements regarding the intended use of proceeds from the offering of the notes. Such forward-looking statements are subject to certain risks, uncertainties and assumptions, including, without limitation, prevailing market conditions and other factors. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. More information about potential risk factors that could affect T-Mobile and its results is included in T-Mobile’s filings with the SEC, which are available at http://www.sec.gov.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240923686495/en/

T-Mobile US Media Relations

MediaRelations@T-Mobile.com

or

Investor Relations

investor.relations@t-mobile.com

Source: T-Mobile US, Inc.

FAQ

What is the total value of senior notes T-Mobile (TMUS) is selling?

T-Mobile USA, Inc., a subsidiary of T-Mobile US, Inc. (TMUS), is selling $2.5 billion in senior notes.

When is the closing date for T-Mobile's (TMUS) senior notes offering?

The offering of senior notes is scheduled to close on September 26, 2024, subject to customary closing conditions.

What are the interest rates and maturity dates for T-Mobile's (TMUS) new senior notes?

T-Mobile is offering 4.200% Senior Notes due 2029, 4.700% Senior Notes due 2035, and 5.250% Senior Notes due 2055.

How does T-Mobile (TMUS) plan to use the proceeds from the senior notes offering?

T-Mobile USA intends to use the net proceeds for general corporate purposes, which may include share repurchases, dividends, and refinancing existing indebtedness.