Sprint (to the finish?)

Marty

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Sprint raised $5 billion from a bond sale to help it pay down short-term debt and further alleviate investor concerns about a cash crunch. The sale, the second-largest U.S. corporate bond sale this year.
  Kansas City, Missouri-based Sprint drew heavy demand even though Moody's Investors Service on Wednesday cut its credit rating because of weakness in its long-distance business.
  Sprint Capital, the Sprint unit that conducted the sale, sold bonds as investors grow more comfortable with corporate bonds, and as the U.S. economy appears to be on the road to recovery.  
 Sprint sold:
-- $1 billion of 7.9 percent three-year notes at 99.921 cents on the dollar to yield about 7.93 percent, just above the 7.9 percent yield expected;
-- $2 billion of 8.375 percent 10-year notes at 99.853 cents on the dollar to yield 8.397 percent, or 3.07 percentage points more than similar maturity U.S.
Treasuries, and
-- $2 billion of 8.75 percent 30-year bonds at 99.443 cents on the dollar to yield 8.803 percent, or 3.07 percentage points more than Treasuries.
 The 10- and 30-year debts were expected to yield 3.05 to 3.1 percentage points more than Treasuries.
 The sale came one day after telecom Qwest Communications International Inc. (NYSE:Q - news), which also faces cash flow concerns, sold $1.5 billion
of bonds. Those bonds, sold with a yield 3.875 percentage points more than Treasuries, were bid Friday to yield just 3.6 percentage points more than Treasuries.
 Grace said investors bought Qwest and Sprint bonds because the terms were ``so attractive, and could get better because the economy is recovering.
 Moody's on Wednesday cut Sprint's senior unsecured debt rating to two notches above ''junk'' status, and warned that the rating may fall further. It said Sprint must show it can cut costs, sell its directory business, and generate ``meaningful'' positive free cash flow.
 

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