Subject: [NEXTEL-1] Nextel Wraps Up $2.2 Bln Loan Refinancing

From: [email-masked]
Date: Fri, 05 Dec 2003 13:58:46 -0500

=DJ Nextel Wraps Up $2.2 Bln Loan Refinancing

12/05/2003

NEW YORK (Dow Jones)--Wireless operator Nextel Communications Inc.
(NXTL) has wrapped up a $2.2 billion loan refinancing - the latest in
a series of efforts to cut the size and cost of its debt pile.

Refinancing and restructuring expensive debt has been a major theme in
leveraged finance this year as historically low rates and heated
demand for higher-yielding investments has enabled many companies to
slash borrowing costs.

Nextel, which is a benchmark issuer in both the junk bond and
institutional loan markets, is folding three institutional loans into
a $2.2 billion facility at 225 basis points over the London Interbank
Offered Rate, people familiar with the transaction said. That's more
than 100 basis points, on average, lower than the rates on the
previous loans, the people said. The company also cut the size of the
loans by roughly $600 million.

Reston, Va.-based Nextel gets good marks from investors and credit
analysts for shoring up its balance sheet over the last few years with
a better operating performance as well as a debt repayment and
restructuring strategy that got underway in 2002. The loan refinancing
follows a series of cash repayments, debt-for-equity swaps and three
high-yield bond offerings totaling $2.5 billion that cut Nextel's
overall debt and dramatically reduced interest expense.

This summer, both S&P and Moody's Investors Service upgraded Nextel,
and the ratings agencies recently have signaled the chance for further
improvement.

In July, S&P raised its corporate credit rating on Nextel to
double-B-minus from single-B-plus, citing improved financial leverage
and a better competitive edge. At the end of October, S&P revised its
rating outlook on Nextel to positive from stable - signaling that
another upgrade could be in the offing.

Also this summer, Moody's raised its rating of Nextel's senior
unsecured debt to B2 from B3 to reflect Nextel's progress in repaying
and refinancing debt as well its continued outperformance in terms of
industry measures, such as average revenue per user, churn, or
customer turnover, and subscriber growth. In November, Moody's raised
its outlook on Nextel to positive from stable.

J.P. Morgan arranged the new loans.

Officials for Nextel weren't available for comment.

-By Nicole Bullock, Dow Jones Newswires, 201 938 2039;
[email-masked]

(END) Dow Jones Newswires

12-05-03 1318ET
http://www.hoovers.com/free/news/detail.xhtml?ArticleID=NR20031205460_cef9000e2621bdc9

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