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Sprint Nextel completed a spinoff of Embarq, its local communications business, on May 17, 2006. This was the last step of the Sprint/Nextel merger agreement forged back in December 2004. The debt offering, Embarq's first step into the debt markets as a stand- alone company, was the second-largest telecom investment debt offering of last year, and the largest investment grade debt offering altogether in 2006. To boot, it was the largest BBB-rated corporate debt offering ever completed, all of which helped make the spinoff, IDD's Telecom Deal of the Year.
The deal leaves Sprint Nextel as the only pure-play publicly traded wireless company-a crucial step in the bumpy integration of the two companies.
Bear Stearns, Goldman Sachs and Lehman Brothers acted as joint lead and joint book-running managers for the senior notes offering. Embarq transferred to Sprint Nextel approximately $2.1 billion in cash and $4.485 billion in senior notes for Sprint Nextel's local telecom division, wholesale product distribution operations, and long-distance customers located in its local service territories.
Sprint Nextel sold the senior notes...