|Day's Range||2.9700 - 3.3000|
Looking for stocks to buy? Get analysis of large-cap stocks like Amazon, Alibaba and Dow Jones stocks GE and Microsoft to see if it's time to buy — or sell.
WeWork parent We Co. has filed a lawsuit against SoftBank, seeking to force its single largest investor and financial rescuer to complete a now-terminated tender offer for $3 billion of WeWork shares.
There was no question T-Mobile CEO John Legere would see a big payoff for closing the company’s acquisition of Sprint – the question was how big it would be.
Last month, the S&P 500 hit bottom at 2,192 and has staged a mild rally since. The index closed out last week at 2,488. These numbers are important – if they hold, they’ll give traders a degree of confidence that the worst is past, at least in the stock market.JPMorgan strategist Jason Hunter is making the case for just that: "The number of states with above 20% COVID-19 confirmed daily case growth already saw a sharp drop from 40 to below 10 into early April. We are interested to see if that deceleration continues and starts to impact the number of states with growth rates above 10%. Based on the recent correlation, case growth deceleration in that group can help put further downward pressure on implied equity volatility and blunt the nature of a retest of the March equity price low.”Hunter sees 2,100 serving as a floor to the S&P 500 moving forward in April, with a ceiling in the range of 2,750 to 2,850. The strategist expects the index to level out at or near its current level, as volatility dampens in response to slowdown in the spread of coronavirus. In New York and New Jersey, the hardest-hit states in the US, Sunday saw the first declines in the daily report of COVID-19 deaths. Hunter sees it as hopeful, saying, “As NYC marked one of the earlier major outbreaks in the U.S., we suspect further growth rate deceleration over the next week or so could help improve market sentiment.”There’s hope that improving sentiment may mark the beginning a virtuous cycle, and perhaps the turn of the tide for the markets. In the meantime, JPMorgan stock analysts are scrutinizing the market, looking the for the right stocks to get that kickstarted.We’ve pulled up three of the investment bank's recent calls, and run them through the TipRanks database. It turns out that two of the firm’s bullish picks have received significant support from other members of the Street. That being said, one name stands out as being an investment to avoid, falling out of favor with JPMorgan as well as the broader analyst community. Let’s take a closer look.Cabot Corporation (CBT)We’ll start in the chemical industry, where Cabot provides a wide variety of products, including carbon and carbon compounds, ink colorants, rare elements such as tantalum, niobium, ad germanium, and a range of specialty fluids. The company’s products have applications in adhesives, air, water, and chemical purification, construction, coatings, light industry, oil drilling – and even in the food and beverage niche.Cabot reported its fiscal Q1 earnings early in February, for the period ending in December, and the results were disappointing. Revenues were down 11% year-over-year, to $727 million, while the 69 cents EPS missed the forecast by 9% and was down 20% year-over-year. It was not a good footing for the company as the coronavirus epidemic was ramping up.Nevertheless, there were some high points. The company’s cash flow exceeded capex by $37 million, and Cabot ended the quarter with $173 million in cash on hand – a 22% increase from year before. Looking forward, management is guiding toward full year earnings of $3.60 to $3.90 per share, in line with previous estimates.The solid cash position underlies the company’s dividend, which Cabot has been paying out reliably for the last 19 years. The current quarterly payment, after three increases in the past three years, is 35 cents, and the annualized payment of $1.40 gives a yield of 5.4%. The average yield among peer companies in the consumer goods sector is 2.5%, making Cabot’s more than double. The payout ratio, at 50%, shows both a commitment to sharing profits with shareholders, and plenty of room for additional increases.Reviewing Cabot for JPMorgan, analyst Jeffrey Zekauskas saw fit to upgrade the stock from Neutral to Buy. He wrote, “The likely strength of Cabot’s cash flows gives us confidence that Cabot will pay its dividend, which now represents a 5.4% yield in a longer-term interest rate environment close to 1%... We believe that Cabot is likely to return to its 2019 level of value and earnings over a three year period (by F2022), and so we think that the returns to the equity holder will approach a doubling of value over that period.”Zekauskas also raised his price target by 19%, to $31, indicating his confidence in a 19% upside for the stock. (To watch Zekauskas’ track record, click here)Over the past 3 months, four other analysts have thrown the hat in with a view on the chemicals and materials maker. The three additional Buy ratings provide Cabot with a Strong Buy consensus rating. With an average price target of $35.25, investors stand to take home an 36% gain, should the target be met over the next 12 months. (See Cabotvstock analysis on TipRanks)T-Mobile US (TMUS)It’s been a memorable spring for T-Mobile, for more than just the obvious reasons. The company on April 1 completed its long merger process with Sprint, making Sprint a wholly owned subsidiary company. The companies were the third and fourth largest wireless carriers in the US market, and together boasted 140 million subscribers at the end of 2019, along with a combined $77.5 billion in top-line revenue. The merger process has taken two years to complete.T-Mobile started the merger process in 2018, with an eye ahead toward 5G. The company sought to increase its customer base, infrastructure, and available capital resources for the rollout of the new networks. That rollout got started this past December, before the merger was complete, when T-Mobile launched 5G digital in over 5,000 cities and towns, covering some 200 million people.The good news for TMUS did not end there. The company saw positive results in the fourth quarter, reporting 87 cents EPS and $11.9 billion in top-line quarterly revenue. The EPS was 4.8% above the estimates, and up 16% year-over-year. The revenue number also beat the forecast, and gained 3.4% yoy.5-star JPMorgan analyst Philip Cusick looks at the implications of the completed Sprint merger for TMUS, and writes, “We believe that T-Mobile will continue to offer a solid product for a lower price than peers AT&T and Verizon, and that the combined company’s network in a few years will be closer to parity with larger peers than it is today, offering more relative value to customers over time.”"Trading at 7.3x 2021E core EBITDA (or 6.0x including full EBITDA synergies) vs 6.6x Verizon and 6.3x AT&T we see T-Mobile as attractive," Cusick concluded.Cusick is impressed enough by the possibilities to initiate coverage of the stock with a Buy rating. His $110 price target suggests an impressive 34% upside potential. (To watch Cusick’s track record, click here.)T-Mobile’s Strong Buy consensus rating is based on 11 Buys that overbalance the single Hold. Shares are selling for $81.98, and the average price target of $103.36 implies a 26% premium. (See T-Mobile’s stock analysis at TipRanks)Tesla, Inc. (TSLA)Tesla has had its ups and downs, and Elon Musk’s genius for generating headlines has made sure that everyone knows about it. In recent weeks, the company has met the COVID-19 crisis with a ventilator prototype made from electric car parts, which is good, and not just as a possible aid in meeting a serious public health need.The electric car giant is facing an automotive production shortfall, as its Shanghai Gigafactory, part of Tesla’s battery supply chain, is unlikely to meet the supply needs of the company’s US, UK, and Australian operations. And in the US, Tesla has been forced to shut down production at its Fremont, California plant since March 23. The shutdown comes just as the company was intending to scale up Model Y SUV production to meet increased demand.Production shortfalls are meeting increased demand, as Tesla earlier this month boasted high electric vehicle sales in Q1. The company reported over 88,000 vehicle deliveries in the quarter, with 76,200 of those being the lower-priced Model Y and Model 3. Quarterly production reached over 102,000 units, and marked the company’s best ever Q1 performance. This was, simply put, a bad time for the COVID-19 epidemic to hit the production lines.Investors have taken notice. TSLA shares are down 47% in the current market slump, a severe underperformance compared to the broader markets.JPMorgan’s 5-star analyst Ryan Brinkman believes "2Q will prove much more challenging (we forecast deliveries -36% q/q to just 57,000), including of course because of COVID-19 but possibly also as a result of the stronger than expected 1Q figures which may have left [production] channels full.”As a result, Brinkman maintains his Sell rating on TSLA shares, with a price target that, at $240, suggests a 50% downside in the coming year. (To watch Brinkman’s track record, click here)Wall Street agrees that Tesla is a risky play. The stock gets a Hold from the analyst consensus, based on a mix of reviews including 4 Buys, 14 Holds, and 10 Sells. The stock is not cheap, and even now sells for $480, while the $505 average price target implies a modest upside of 5.24%. (See Tesla’s stock analysis at TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Highly rated U.S. companies are on a borrowing spree, loading up their balance sheets with cash, even before the Federal Reserve starts buying corporate debt to help soothe the economic fallout of the coronavirus pandemic.
New York, April 03, 2020 -- Moody's Investors Service, ("Moody's") has upgraded three classes of notes sponsored by Sprint Corporation (Sprint). The Series 2016-1 Class A-1 notes and Series 2018-1 Class A-1 and Class A-2 notes were issued under the same master trust and are backed by a single 30-year lease to Sprint Communications, Inc. (SCI) for a portfolio of wireless spectrum licenses and are further enhanced by guarantees from T-Mobile US, Inc. (T-Mobile US), T-Mobile USA, Inc. (T-Mobile, Ba2 stable), Sprint and certain operating subsidiaries.
Within six years, the new T-Mobile (TMUS) is likely to provide 5G service to 99% of U.S. citizens with average speed of above 100 Mbps to 90% of the population.
Mike Sievert says New T-Mobile will start "lighting up 5G" immediately now that the $37 billion merger has wrapped
There's no doubt that the market is getting brutalized with regularity these days.Much of it is the economic implications of the novel coronavirus and how the U.S. economy recovers from the lockdowns, market losses and credit issues. Some of it has to do with the end of a bull market without significant corrections.That had a lot to do with central banks managing the major economies around the world, which gave business a solid platform of support so companies could grow consistently, if not grandly.InvestorPlace - Stock Market News, Stock Advice & Trading TipsA predictable market is what Wall Street likes, and it had it for a long time.But things have changed. Yes, the Federal Reserve and other central banks are stepping in with unprecedented measures, but managing a pandemic is hardly predictable.That why it pays to have solid, reliable stocks in your portfolio that will be there through it all -- and certainly after it all shakes out. The seven telecom stocks worth a look here are just those types of stocks. * 7 Dividend Stocks at Risk of Slashing Payouts All that telecommuting and streaming going on now -- many of these telecom stocks benefit from that and from massive future growth opportunities in the industry. And all are A or B rated by my Portfolio Grader. Telecom Stocks to Buy: T-Mobile (TMUS)Source: Tupungato / Shutterstock.com T-Mobile (NASDAQ:TMUS) is working hard to become the No. 3 mobile carrier in the U.S. And now that its merger with former rival Sprint (NYSE:S) has received all the necessary approvals, that goal is much closer.It has taken a long time for this merger to work out. But its $75 billion market capitalization makes it a significant player in the U.S. telecom market now.Having been the underdog for so long, and being led by the unconventional John Legere -- who stepped down as CEO on April 1, a date likely consciously chosen for its irony -- it has already proven that corporate titans in telecom have a challenge on their hands.TMUS stock doesn't pay a dividend, but the stock is up 25% in the past 12 months. It's up 11.2% in the past 3 months, which shows this is where a lot of money is moving in the down market. Cogent Communications (CCOI)Source: Pavel Kapysh / Shutterstock.com Cogent Communications (NASDAQ:CCOI) is a Tier 1 internet service provider (ISP) that is one of the top 5 networks in the world. Basically, it provides internet access to companies from large to small as well as carriers, service providers and other businesses that need internet access.It was built on the concept of treating bandwidth like a commodity, so it bills its customers by usage, rather than a set fee structure. And it operates outside of the regional Bell operating companies (RBOCs) -- like AT&T (NYSE:T) and Verizon (NYSE:VZ) -- so it doesn't depend on negotiating contracts with rivals for accessing bandwidth.That also allows it significant flexibility in building out its offerings. And given the fact that much of the world is on lockdown right now, that means all those telecommuting office workers and all those streaming services are filling CCOI's pockets.Because it's a very focused company, it's not huge -- it has a $3.8 billion market cap -- but it does have 54 internet data centers around the world, and provides service to more than 205 major markets and more than 6,950 other networks. * 7 Strong Stocks to Buy to Survive the Coronavirus Crisis The stock is up 51% in the past year and nearly 24% in the past 3 months. And, when it comes to future prospects, the growth story here is much larger than any one stock. Telecom Stocks to Buy: BCE (BCE)Source: madamF / Shutterstock.com BCE (NYSE:BCE) is the Canada version of the Bell companies in the U.S. As a matter of fact, it was launched in Canada in 1880 as the Canadian spinoff of the old Ma Bell.But over the years it has developed its own identity in the Great White North. And it is a dominant player in the Canadian telecom sector. It offers the same broad list of services offered by its U.S. Bell brethren and should see a growth in usage during these Covid-19 times.But it's rock solid and has a firm foothold on its business.While the stock is off 13% in the past 12 months, most of that has happened in the past 3 months. And at this point, it delivers a very attractive 6.3% dividend. Iridium Communications (IRDM)Source: Shutterstock Next on my list of telecom stocks is Iridium Communications (NASDAQ:IRDM). It has a product you have likely seen in any number of military or spy movies when the protagonist is out in the middle of nowhere and grabs a phone to call in a strike and request support.It makes those satellite phones that work anywhere -- like the top of Mount Everest, the jungles of the Amazon or the middle of the Gobi Desert or Indian Ocean.The company did not have an auspicious start in 1998, at the height of the dot-com bubble. It declared bankruptcy by 1999. Its grand idea of having 77 satellites circling the Earth, connecting people everywhere was bold -- and expensive. And the money dried up.But it was revived after the crash, and now launching satellites is much cheaper and easier. And it has created a large network of 66 satellites that circle the globe, connecting ocean-going vessels, aviators and far-flung land-based people with reliable communications to anywhere -- and from anywhere -- in the world.The company has a reliable market, but its goal is to bring on consumers at some point. But that takes lots of money, especially to make it available for reasonable rates. This market is tough for that, but the stock is off just 22% in the past 12 months, all of that in the last month.Since it has no dividend, this is a growth stock play. I do, however, have a growth and income opportunity available for you in my investment report, The Netflix of 5G. AT&T (T)Source: Jonathan Weiss/Shutterstock AT&T (NYSE:T) is the original Ma Bell -- the telephone company of America. It's also one of the key telecom stocks in the U.S. And that means it's big. If anything is happening in telecom that's worth being involved in, T is there.And it can afford to do that because it has a market cap of more than $200 billion. While it used to be the home to one of the most innovative research and development organizations in the world -- Bell Labs -- it now has a different approach.When the new, disruptive technologies hit, T waits to see the best of the new companies and then buys them. That was the strategy with mobile, which was a game changer for T stock.And now it's in the content business with its acquisition of TimeWarner.The fact is, it's hard to imagine the U.S. without T. But that certainly isn't the reason to own it. The reason for that is T knows how to run its business and do it profitably in good times and bad.And its content acquisition means it can also diversify its revenue stream. And as I said before, there's a lot of content streaming going on. Also, T is very involved in rolling out 5G, which will also be a huge opportunity.The stock is off 11% for the year and 27% in the past 3 months. However, it's well valued here and is delivering a solid 7.1% dividend to pay for your patience. Vonage (VG)Source: STEFANY LUNA DE LINZY / Shutterstock.com Vonage (NASDAQ:VG) was one of the pioneers of voice-over-internet protocol (VoIP) for consumers in the early 2000s. As mobile phones were still catching on, the new disruptive technology at the time was to use the internet to make phone calls.The problem was connectivity was challenging -- some places it was faster than others and service may be impossible in others. It was a gamble, but it paid off.Since then, VG has moved into business services as well. And operations have moved to the cloud for even more service options. Ultrafast 5G wireless may provide further opportunities for this and many, many other companies (and their investors).While the company only has a $1.6 billion market cap, it has a solid group of customers and remains a well-run business. Analysts are currently upgrading their ratings on the stock and it would also be a good buy for a larger telecom looking to expand its user base. * 10 Stocks to Buy That Will Benefit From Coronavirus Mayhem The stock is off 33% in the past 12 months and only 10% in the past 3 months. It's a tempting takeover here. Shenandoah Telecommunications (SHEN)Source: Piotr Swat / Shutterstock.com The last of my telecom stocks to buy is Shenandoah Telecommunications (NASDAQ:SHEN). It has been around since 1902, serving the rural communities of the Shenandoah Valley in Virginia.It remains a relatively small firm, with a $2.4 billion market cap. But its service area now includes two large colleges and all the telecom needs -- land based, broadband and mobile -- for the students and the expanding communities and businesses. It has also expanded broadband into West Virginia, Maryland and Kentucky. And it owns 225 mobile towers in its service area, which is another great source of revenue, especially as 5G becomes more broadly deployed.It will benefit from the Great Lockdowns that are now happening as well as population growth as people from the DC metropolitan area move out to exurbia and telecommute.The stock is up 5% in the past 12 months, and up 13% in the past 3 months, showing that it's a rock-solid stock when things get crazy. It has a 0.6% dividend.Once those lockdowns lift, of course, it'll be time to look at the big picture. And for telecom stocks -- and many, many related names -- the big picture is the 5G revolution. The 5G Buildout Is an Incredible Opportunity for Investors Right NowWithin two years, most cell phones will be 5G enabled and be able to wirelessly handle television streaming. With 5G, we'll have cable modem speeds on any device; no need to plug in. That's a big deal for rural areas … the very same areas that are also key to President Donald Trump's reelection. So, by pushing 5G over the goal line, Trump will deliver a big win for his base -- and strike a blow against Chinese rivals like Huawei Technologies.But, in the big picture, 5G is about much more than trade wars and faster downloads. Because 5G is 100 times faster than 4G, it'll allow your internet devices to work in real time. That advancement is a game changer for tech companies.With the 5G infrastructure market set to grow at an annual rate of 67% over the next 10 years, the entire market will go from $780 million to nearly $48 billion. This buildout is where I see opportunity with 5G stocks now.Cable companies can do their best to fight back with fiber optics … but they can't compete with the convenience of a smartphone, once it's got ultra-fast 5G. That's how my 5G infrastructure play will capture more market share from the broadband cable companies.The stock I'm targeting is a favorite on Wall Street, and it has strong fundamentals, too -- making it a "Buy" in my Portfolio Grader system.Click here to watch my new, free briefing on this extraordinary technology and the opportunity with 5G stocks.When you do, you'll see how to claim a free copy of my new stock report, The Netflix of 5G, which has full details on this company -- and what makes it such a great investment.Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system -- with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the "Master Key" to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters. More From InvestorPlace * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * This Stock Picker's Latest Video Just Went Viral * The 1 Stock All Retirees Must Own The post 7 Telecom Stocks That Are Worth a Close Look appeared first on InvestorPlace.
T-Mobile US, Inc. (NASDAQ: TMUS) ("T-Mobile") announced today that T-Mobile USA, Inc. ("T-Mobile USA"), its direct wholly-owned subsidiary, has agreed to sell $3,000,000,000 aggregate principal amount of its 3.500% Senior Secured Notes due 2025, $4,000,000,000 aggregate principal amount of its 3.750% Senior Secured Notes due 2027, $7,000,000,000 aggregate principal amount of its 3.875% Senior Secured Notes due 2030, $2,000,000,000 aggregate principal amount of its 4.375% Senior Secured Notes due 2040 and $3,000,000,000 aggregate principal amount of its 4.500% Senior Secured Notes due 2050 (collectively, the "Notes") in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The offering of the Notes is scheduled to close on April 9, 2020, subject to satisfaction of customary closing conditions. T-Mobile USA intends to use the net proceeds of this offering to repay amounts borrowed under the bridge credit agreement it incurred in connection with T-Mobile’s business combination with Sprint Corporation and liabilities under related interest rate protection agreements.
T-Mobile borrowed $19bn on Thursday to fund its $66bn purchase of US telecoms rival Sprint, taking advantage of red-hot funding markets for high-quality corporate bonds. The debt offering, the second-largest corporate bond sale this year, will be used to repay a loan T-Mobile had drawn down just days earlier that its lenders across Wall Street had been forced to fund themselves given the market turmoil, according to people briefed on the matter. Bankers leading the bond offering at Barclays, Deutsche Bank and Goldman Sachs received roughly $65bn of orders from investors for a piece of the $19bn of bonds, underscoring the demand for investment-grade debt, two of the people said.
(Bloomberg) -- T-Mobile US Inc. sold $19 billion of bonds on Thursday to help finance its acquisition of Sprint Corp., in the second-biggest bond sale this year.Investors placed about $75 billion of orders at the peak for the highly-anticipated bond offering, which started marketing nearly a year ago, according to people with knowledge of the matter. It’s been on the sidelines as the companies had to clear several regulatory hurdles to close the deal, which was further complicated by the Covid-19 pandemic.T-Mobile formally completed its merger with Sprint Wednesday, and was quick to restart marketing for what it said could be a $10 billion bond sale soon after. The proceeds will help refinance a $19 billion bridge loan, likely eliminating the need to raise additional funds through bonds denominated in other currencies including euros.Read more: IG ANALYSIS US: T-Mobile Builds $75b Book, Week Sets New RecordThe mobile carrier sold investment-grade, senior secured bonds in five parts. The longest portion of the offering, a 30-year security, will yield 3.25 percentage points above Treasuries, after initially price talk around 3.75 percentage points, according to one of the people familiar, who asked not to be identified as the details are private.The bond offering quickly gets T-Mobile’s banks out of the vast majority of the $23 billion of debt they had agreed to provide to help finance the merger. After the $19 billion bridge loan is repaid with proceeds from the bond sale, the lenders will keep on their books only a $4 billion seven year-term loan to be syndicated to institutional investors. The loan pays 3 percentage points over the benchmark Libor rate, according to a regulatory filing on Wednesday.At $19 billion, T-Mobile’s sale is the second-largest this year. Oracle Corp. took the top spot for 2020 with a $20 billion offering Monday.Barclays Plc, Deutsche Bank AG and Goldman Sachs Group Inc. are managing the bond sale, the person said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Investors are finally warming up to the high-yield market, piling into a handful of new deals and propelling inflows to a record high.Junk bond funds took in $7.09 billion for the week ended April 1, according to Refinitiv Lipper, setting a new weekly record. The cash influx comes on top of three new high-yield offerings Thursday, opened up by the success of deals from Carnival Corp. and YUM! Brands Inc. earlier this week.Issuers are seeing a resurgence in risk appetite, as massive demand for new bond sales has allowed companies to go bigger and bolder with their debt offerings. T-Mobile US Inc. is issuing $19 billion of secured investment-grade bonds in the year’s second-largest sale, while Tenet Healthcare Corp. and TransDigm Group Inc. were able to boost the size of their high-yield offerings.Investment-grade issuance in the U.S. set a new weekly record, with T-Mobile and Oracle Corp. pushing supply to $110.9 billion through Thursday, edging past last week’s total. Issuers came forward with strong reception despite a record high number of U.S. jobless claims, on top of 17 new deals in Europe.Credit investors’ desire for European corporate debt showed no sign of easing as they threw more than 70 billion euros ($76.5 billion) toward new European bond offerings in just one day. Among the big ones today were oil majors BP Plc and Royal Dutch Shell Plc, taking advantage of rising oil prices after China said it would boost its reserves.“Primary market activity has resumed with a vengeance,” said Wolfgang Bauer, a fund manager at M&G Plc. “It’s fair to say that market functionality in the European investment-grade market, particularly on the primary market side, has noticeably improved over the past week.”U.S.T-Mobile was by far the largest deal on the docket today, and the second-largest this year coming behind Oracle. Investment-grade issuance reached $32.1 billion Thursday.Tenet, TransDigm and Restaurant Brands are bringing high-yield offerings, following YUM! Brands which reopened that market MondayCarnival, though technically investment-grade rated, was run off the high-yield syndicate desks and was able to boost the size and cut the coupon WednesdayFor deal updates, click here for the New Issue MonitorFunds that invest in high-yield corporate debt saw investors add $7.09 billion for the week ended Wednesday, according to Refinitiv Lipper data. Investment-grade funds saw continued outflows as $8.47 billion was withdrawn Boeing is offering buyouts to its entire staff of 161,000 people and weighing new output reductionsPimco sees opportunities in bonds issued by high-quality companies in the utility, power, health care, cable and telecom sectors, according to Mark Kiesel, the firm’s chief investment officer for global creditBankrupt shale driller Alta Mesa Resources has a tentative deal to sell itself for $220 million, down from $320 million before the buyer demanded a discount because of the coronavirus pandemicBanks that agreed to help finance leveraged buyouts are starting to feel the pain from a freeze in the market for risky corporate debtEuropeOil giants BP Plc, Royal Dutch Shell Plc and OMV AG all offered euro notes Thursday, capitalizing on a boost in oil prices after China moved forward with plans to bolster its reserves.Lloyds Bank Corporate Markets Plc and British American Tobacco Plc rounded out a total of 17 issuers that sold EU25.46bRampant demand has allowed companies to chop pricing on their bonds, with Schneider Electric SE pulling in a staggering 8.8 billion euros of orders for a 500 million-euro seven-year noteMore triple-B rated companies dove into the market, including LafargeHolcim“While last week the focus had still been firmly on issuers at the higher end of the investment-grade quality spectrum, this week BBB-rated issuers have joined the new issue pipeline,” said M&G’s BauerCorporate bond spreads continue to ease from the highest levels since 2012, falling 3 basis points to 239 basis points on WednesdayDefault-swaps insuring the highest-rated corporate debt remain elevated at about 105 basis points. Nonetheless, this compares to a peak of about 138 basis points reached last month, according to a Bloomberg Barclays indexBanks may ask authorities to advise against calls on some instruments if the economy deteriorates further, Jakub Lichwa, a strategist at Royal Bank of Canada, wrote in a noteAsiaThursday was a down day for credit in Asia. Yield premiums on Asian dollar bonds and the cost of insuring debt against default in the region both increased, as more dour news on the coronavirus pandemic limited risk-taking. Read more about that here.Spreads on top-rated Asian dollar bonds were around 10 basis points wider Thursday, according to traders, after rising 3 basis points Wednesday. They are headed for a seventh straight week of increases, the longest such streak in more than a year, according to a Bloomberg Barclays indexThe Markit iTraxx Asia ex-Japan index of credit-default swaps rose about 5-8 basis points on Thursday, according traders. The gauge widened 13 on Wednesday, according to CMA dataChinese investment-grade dollar bonds may continue to outperform other emerging-market peers, says Todd Schubert, head of fixed-income research at Bank of Singapore Ltd. Better-rated Chinese notes are often government related and seem to be considered a safe haven in emerging economies, he saysSouth Korea’s 20 trillion won ($16 billion) bond stabilization fund started buying corporate notes and commercial paper from today, the Financial Services Commission said. The regulator believes the fund will act as a safety net for the marketA sale of asset-backed securities by Korean Air Lines Co. showed carriers pummeled by the coronavirus outbreak can still issue debt, though at a steep cost. Here’s a chart showing the tumble in the airline’s dollar notes:For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
When Quibi launches on Monday, some T-Mobile customers will get the short-form, mobile-first platform for free. Actually, everyone can sign up for a 90-day free trial of the new streaming service, which is being launched by Jeffrey Katzenberg on April 6. The telco giant has offered a similar deal for Netflix since 2017.
(Bloomberg Opinion) -- A headline from three days ago read “Banks Stuck With $23 Billion of Loans for T-Mobile’s Sprint Deal.” A group of 16 banks would have to provide money to T-Mobile US Inc. to close its planned acquisition of Sprint Corp. because they couldn’t sell debt to third-party investors. T-Mobile would refinance the bridge loan in the bond market as soon as financing conditions improved.Well, that was quick.The mobile carrier plans to tap the corporate-bond market Thursday with a deal of about $10 billion, with proceeds helping repay that $19 billion bridge credit agreement (it signed a new $4 billion term loan on Wednesday as well). Even though it’s one of the biggest debt sales of the year, financial markets still remain highly volatile and T-Mobile’s credit rating was cut this week deeper into speculative grade, the company received more than $30 billion of orders from investors, Bloomberg News’s Molly Smith reported.That’s impressive, considering that the initial pricing levels for this investment-grade offering were already favorable for the company. T-Mobile’s 10-year bonds are expected to yield around 375 basis points more than benchmark Treasuries, Bloomberg News reported, citing a person familiar with the matter. By comparison, a Bloomberg Barclays index of triple-B corporate bonds with an average maturity of 11.75 years has a spread of 359 basis points, near the lowest since March 18. That’s close enough — and it’s likely that T-Mobile’s gap will narrow with such a large order book.It’s even more interesting to compare this new deal, with the lowest investment grades of Baa3 by Moody’s Investors Service and BBB- by S&P Global Ratings, and T-Mobile’s last offering in January 2018, which is speculative grade. The company priced 10-year bonds at the time at a spread of 209 basis points more than Treasuries, to yield 4.75%. T-Mobile’s spreads are now much wider, even though this new debt is “senior-secured,” but 10-year U.S. yields are more than 200 basis points lower than they were 26 months ago. That means the all-in 10-year yield for T-Mobile will probably be about 4.35% — a good deal lower than the previous rate.This is important context to remember for both companies and bond buyers. The rapid price swings across markets in the past month and the focus on yield spreads have somewhat masked the fact that whenever the outlook starts to stabilize, borrowing costs will once again be as low as ever for creditworthy corporations. The benchmark 10-year yield is a mere 0.6%, near the all-time low closing level of 0.54% set on March 9. Bank of America Corp. technical strategists said in a report Thursday that the benchmark could reach 0% this quarter and potentially even turn negative if governments struggle to contain the coronavirus outbreak.With so much uncertainty, it’s understandable that T-Mobile seized on this window to get on with its plans. It formally completed its merger with Sprint on Wednesday morning. Mike Sievert, who was named chief executive officer, told Bloomberg TV on Wednesday that the timing of the bond sale relative to the bridge loan was “coincidental.” The fact that the group of banks was ready to help get the acquisition over the finish line was the most prudent first step, he said. Then the company deemed the market had thawed enough to borrow.“We’ve been watching the markets over the past few days and seeing an improving condition for us to go to the market with this investment-grade offer. Today looked like the right day,” Sievert said. “The last couple of days, obviously we were in the process of taking down the bridge and we had the merger news that made the last couple of days the wrong time to be in the market.”Obviously, T-Mobile would have had a better borrowing backdrop a few months ago. But large companies are rarely in position to perfectly time the market. In most cases, good reception is enough. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
T-Mobile this morning officially announced its exclusive partnership with the new streaming service, Quibi, set to launch on April 6. The service will be made available for free for a year to T-Mobile customers on its unlimited wireless family plans. The streaming service, founded by Hollywood media mogul Jeffrey Katzenberg, has been specifically built for on-the-go viewing on mobile devices.
We’re leaning on our smartphones more than ever to stay connected and entertained. T-Mobile’s (NASDAQ: TMUS) got your back! Now, T-Mobile customers get Quibi on us! Short for ‘quick bites’ and led by Quibi founder Jeffrey Katzenberg and CEO Meg Whitman, Quibi breaks new ground in the entertainment space with premium, original content designed specifically for your phone that you can watch in 10 minutes or less. And when Quibi launches on April 6, Un-carrier customers get Quibi included in their Magenta family plans thanks to an exclusive partnership between T-Mobile and Quibi. After a full year of Quibi on Us and Netflix on Us, customers can choose to continue with one or the other.
(Bloomberg) -- SoftBank Group Corp. scrapped an agreement to spend $3 billion to buy WeWork stock from former Chief Executive Officer Adam Neumann and other shareholders, despite threats of legal action from some members of the company’s board.SoftBank had agreed to buy the shares from Neumann, Benchmark Capital and others as part of a bailout package last year, but notified stockholders in mid-March that conditions for the deal hadn’t been met. On Thursday, after the deal’s deadline passed, SoftBank confirmed it would end the offer, citing five conditions that were not satisfied by the closing date.“SoftBank remains fully committed to the success of WeWork and has taken significant steps to strengthen the company since October, including newly committed capital, the development of a new strategic plan for WeWork and the hiring of a new, world-class management team,” said Rob Townsend, chief legal officer at the company. “The tender offer was an offer to buy shares directly from other major stockholders and its termination has no impact on WeWork’s operations or customers.”SoftBank shares rose 2.5% while the broader Japan market fell.A WeWork committee of two independent directors voiced disagreement over SoftBank’s decision and suggested there may be legal action.“The Special Committee is surprised and disappointed at this development, and remains committed to reaching a resolution that is in the best interest of WeWork and its minority shareholders, including WeWork’s employees and former employees. The Special Committee will evaluate all of its legal options, including litigation,” the committee, made up of Benchmark’s Bruce Dunlevie and another director, Lew Frankfort, said in an emailed statement.The share purchase was hammered out in October as part of SoftBank’s rescue of WeWork, after the co-working company’s failed initial public offering left it weeks away from running out of money. In the deal, the Japanese conglomerate would have taken a stake of almost 80% in the company and buy $3 billion in shares from investors as well as current and former employees. Neumann, ousted in the deal, was set to sell up to $970 million in shares. The generous exit package angered many of his employees, thousands of whom had their jobs eliminated in the following months as WeWork parent We Co. tried to cut its expenses.WeWork signs long-term leases with landlords around the world and then rents that space to smaller companies and freelance workers, a business that has been particularly vulnerable to the coronavirus and economic slowdown. In a letter to bondholders, the company warned it didn’t expect to hit its financial targets for 2020.“Given our fiduciary duty to our shareholders, it would be irresponsible of SoftBank to ignore the fact that the conditions were not satisfied and to nevertheless consummate the tender offer,” Townsend said.In the past few weeks, the shareholder buyout deal has become increasingly contentious. SoftBank sent the letter to WeWork investors saying it could withdraw from the agreement if certain conditions weren’t met by the deadline. SoftBank cited regulatory concerns and a handful of government investigations into WeWork, including from the U.S. Securities and Exchange Commission and the Justice Department.The two WeWork independent board directors responded, saying they would consider legal action if SoftBank pulled out. “Its excuses for not trying to close are inappropriate and dishonest,” a spokeswoman for the directors had said in a statement.The latest deal is separate from SoftBank’s bailout of WeWork itself, a package that included $5 billion in new financing and the acceleration of an earlier $1.5 billion commitment. Most of the money would have gone to five shareholders, including Neumann and the venture capital firm Benchmark, which was looking to sell $600 million in shares, Bloomberg has reported. Less than 10% of the proceeds would have gone to current WeWork employees, SoftBank has said.Still, the transaction has repercussions for WeWork. As part of the deal, the company would have gotten $1.1 billion in debt financing from SoftBank if the share purchase was completed. The Japanese company has decided it is not legally obligated to provide that capital, although it may yet do so, according to a person familiar with the matter.SoftBank and its affiliates have committed more than $14.25 billion to WeWork to date, including $5.45 billion since October, the company said in its statement. WeWork had $4.4 billion in pro forma cash and cash commitments at the end of 2019, SoftBank said.Separately, SoftBank said it completed the sale of its U.S. unit Sprint Corp. to T-Mobile US Inc. The deal removes about $40 billion in net debt from the Japanese conglomerate’s balance sheet.(Updates with details on financing in 13th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Following a two-year struggle, Sprint and T-Mobile (TMUS) have finally completed their merger to create a new super-sized T-Mobile.The announcement described the new company as “a supercharged Un-carrier that will deliver a transformative 5G network.” Indeed, the new company will have 14 times more capacity in the next six years than T-Mobile alone has today, which according to the statement should allow the company to “leapfrog the competition.”What’s more, the new T-Mobile aims to offer customers access to average 5G speeds up to eight times faster than current LTE in just a few years and 15 times faster over the next six years.Within six years, the New T-Mobile plans to provide 5G to 99% of the U.S. population and average 5G speeds in excess of 100 Mbps to 90% of the U.S. population.“New T-Mobile’s wireless in-home broadband service will overcome the obstacles to extending traditional wireline access by blanketing high-capacity coverage over previously difficult to serve areas. Its network will deliver 100+ Mbps speeds for wireless broadband to 90% of the population and offer in-home service to millions of the country’s households in the next six years” explains the announcement.T-Mobile US, Inc. is the parent of the combined company and its shares will continue to trade on the NASDAQ Global Select Market under the symbol “TMUS”. The stock has a bullish Strong Buy analyst consensus on TipRanks, with an average analyst price target of $102 (20% upside potential). (See T-Mobile stock analysis on TipRanks)The company also announced that with close of the merger, the CEO role has transitioned from John Legere to Mike Sievert ahead of schedule. Sievert, who has served as CEO of T-Mobile since 2012, commented “During this extraordinary time, it has become abundantly clear how vital a strong and reliable network is to the world we live in. The New T-Mobile’s commitment to delivering a transformative broad and deep nationwide 5G network is more important and more needed than ever.”Under the terms of the transaction, Sprint shareholders will receive a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share, or the equivalent of approximately 9.75 Sprint shares for each T-Mobile share.Related News: Xerox Pulls Out of $35 Billion Hostile Bid For HP Tower Semiconductor Bucks Downhill Trend By Reaffirming Q1 Guidance and Growth Rate Judge’s Record Looks Unpromising for Amarin’s Appeal; Analyst Remains Bullish More recent articles from Smarter Analyst: * Costco Reports Strong March Delivery With $1.5 Billion Sales Bump * Stitch Fix Reveals Significant Logistics Disruption, Withdraws Guidance * Starbucks Feels The Pain; Expects 46% Fall In Earnings, Pulls Full Year Guidance * Covid-19: Could Bellerphon Therapeutics’ INOpulse Help Address Hospital Ventilator Shortage?
(Bloomberg) -- After closing an industry-altering U.S. wireless deal, Deutsche Telekom AG’s Chief Executive Officer Tim Hoettges now wants to change telecommunication markets closer to home. Europe’s phone industry needs mergers if it wants to build the kind of superior infrastructure needed to compete with bigger rivals in Asia and the U.S., Hoettges said Wednesday. He indicated he’s willing to get the German carrier involved in M&A to achieve that goal. “Europe is too fragmented,” Hoettges said in a phone interview. “Wherever I see a deal or an opportunity for European market consolidation that’s convincing, then I would always look at that with the partners.”Deutsche Telekom’s U.S. unit T-Mobile US Inc. on Wednesday completed its $26.5 billion acquisition of Sprint Corp. after a years-long saga that included a standoff with antitrust officials and a court battle with U.S. states. Hoettges pushed for the combination for years to give the company a stronger vehicle to expand in the profitable U.S. market. T-Mobile’s importance for Deutsche Telekom has grown steadily and it now accounts for about half of sales, up from around a third in 2014.“Our goal is to become the number-one in the U.S. market,” Hoettges said.T-Mobile and Sprint scrapped a previous plan to merge in 2014 after meeting resistance in Washington. Their second attempt failed in late 2017 when Hoettges and Masayoshi Son, the chairman of Sprint’s parent company SoftBank Group Corp., couldn’t agree on how to structure control of the combined entity, people familiar with the matter said at the time.Hoettges brought the merger back from the dead a few months later. On Jan. 1, 2018, he took out his phone and tapped out an SMS to Son, wishing him a happy New Year and expressing regret that the merger hadn’t happened. It reignited a conversation that culminated in Wednesday’s deal.It frees Hoettges to focus on markets in Europe, where more than 100 wireless carriers vie for airwaves and customers. Outside Deutsche Telekom’s business in Germany, where it competes with Vodafone Group Plc and Telefonica SA, Deutsche Telekom has units in countries from Poland to the Netherlands and Romania.“Of course I was very much focused on America,” Hoettges said. “But I will work with verve on changing the regulatory and antitrust-law framework” in Europe to help bring about the consolidation the region needs, he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
T-Mobile said CEO John Legere is stepping down earlier than expected. He's been replaced by new CEO Mike Sievert.
Following a banner March, April could see another $150 billion to $200 billion of borrowing from investment-grade U.S. companies, including the financing of T-Mobile’s acquisition of Sprint.
(Bloomberg) -- Amid all the economic despair in the age of coronavirus, there is still something about the promise of sky-high returns that the American investor finds irresistible.Cruise line operator Carnival Corp. proved that Wednesday when investors clamored to buy a new $4 billion bond sale that pays interest of 11.5%, one of the highest coupons ever offered, particularly by an investment-grade rated company. Demand was so frenzied -- as high as around $17 billion -- that Carnival was able to cut the coupon and increase the original size of the offering by an extra $1 billion, according to people familiar with the situation.Even with the economy spinning down, corporations around the globe have been able to tap the bond market to raise record amounts from investors in recent weeks. While executives are looking to stay liquid, investors’ confidence was buoyed by the trillions of dollars the Federal Reserve and other central banks are spending to buttress their economies.The demand for Carnival’s bonds was especially notable because investors have largely shunned riskier firms. Its business has been ravaged by the virus and investors still can’t be sure when the company will sail again. Appropriately enough, the majority of orders for Carnival’s offering are from junk-bond accounts.Yields that approach Carnival’s heights are usually seen only on the riskiest types of junk bonds, such as those issued from holding companies that are further removed from real assets or those that give borrowers the option to delay cash interest payments.A flurry of other bond deals Wednesday continued a strong performance for much of March, with 11 new investment-grade dollar deals, and T-Mobile US Inc. is marketing a potential $10 billion offering for its acquisition of Sprint Corp. Europe had 17 new deals, its busiest day since January, including Tiffany buyer LVMH and Absolut Vodka maker Pernod Ricard SA.Overall in March, U.S. investment-grade issuance topped $259 billion for a new monthly record, while European supply passed 135 billion euros ($148 billion), the most since 2016. Asia’s dollar market was quiet for most of the month, though Chinese internet search giant Baidu Inc. announced a deal to start April.Still, returns were dismal. Even with the Fed’s help fueling a late stage rally, March was still the worst month for returns since the end of 2008, with U.S. high-yield down 11.5% and investment grade dropping 7.1%. The European index lost 6.9% in March, its biggest loss ever. Spreads on top-rated Asian dollar bonds ended the first quarter 146 basis points wider, the worst blowout since 2009.“We expect issuance to continue as corporates look to bolster liquidity,” said Henrik Johnsson, co-head of capital markets at Deutsche Bank AG. “The long term effect of all this debt is hard to quantify.”U.S.Credit markets weakened with stocks on Wednesday as President Donald Trump told the U.S. to brace for one of its toughest stretches as a nation, with the death toll from the virus projected to potentially top 200,000. The high-grade borrowing bonanza showed no signs of abating with 11 companies launching $28.5 billion in new debt, meaning 36 issuers have already priced $78.8 billion this weekT-Mobile has hired banks to market its secured bond offering to investors, which may come Thursday in dollars and/or euros with maturities ranging from five to 40 yearsCarnival wrapped up its $4 billion bond sale after boosting the dollar component, dropping the euro tranche and getting a two-notch downgrade from Moody’s Investors Service on TuesdayAB InBev is testing investor demand with a four-part offering of maturities due between 10 and 40 years, capitalizing on interest lately in the long end. It sold 4.5 billion euros of bonds Monday, and may need to cut its dividend to preserve ratingsFor deal updates, click here for the New Issue MonitorOil producer Whiting Petroleum filed for bankruptcy, the first big casualty of a global collapse in crude prices that’s leaving debt-laden shale explorers struggling to surviveEuropeSeventeen deals priced Wednesday in the primary market’s busiest day for more than two months, totaling 26.8 billion euros. It follows the best-ever quarter for debt sales, with more than 510 billion euros priced, mainly reflecting huge volumes at the start of the year, and lots of reverse Yankee issuance.Borrowers including LVMH Moet Hennessy Louis Vuitton SE and Absolut Vodka maker Pernod Ricard SA are leading a calendar set to price 26.57 billion eurosInvestors have thrown almost 100 billion euros worth of cash at today’s deals, according to data compiled by Bloomberg, led by demand for offerings from Portugal, Total Capital International SA, a euro green note offered by Spain’s Iberdrola Finanzas SA, LVMH and Pernod RicardSpreads on euro IG company bonds remain elevated but have fallen about 8 basis points from multi-year highs reached on March 24, according to a Bloomberg Barclays indexSpanish bankers and lawyers are bracing for a steep surge in insolvencies, amid the country’s rising death toll and strict lockdown measures. Prime Minister Pedro Sanchez has announced 117 billion euros of fiscal stimulus, but some business leaders say aspects of the government’s response risk making things worseEuropean banks may get more time to meet loss-absorbing debt targets, the euro-area’s Single Resolution Board said. It’s ready to adapt transition periods and interim targets to help them deal with the coronavirus falloutAsiaThe rebound in global bond sales in recent weeks has so far eluded Asia. After record issuance in January, sales of dollar securities by the region’s issuers, including financials and sovereigns, sputtered in the first quarter, totaling about $86 billion, up only about 3% on the year-earlier periodOne reason for that is that unprecedented stimulus from the Federal Reserve and European Central Bank has had more direct benefits in the U.S. and European marketsAnother factor is that Asian companies have been able to tap local-currency markets. Chinese companies sold a record amount of domestic bonds in March, for example, after Beijing flooded markets with cashBut there have been signs in recent days that more borrowers may offer dollar debt. Chinese tech giant Baidu Inc. was marketing an offering WednesdaySpreads on top-rated Asian dollar bonds were 10-20 basis points wider Wednesday, according to traders. They ended the first quarter 146 basis points wider, the worst blow-out in a Bloomberg Barclays index going back to 2009For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.