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Sprint-Nextel Wins on Softbank Deal

Stocks in this article: S T VZ CLWR

Other analysts have also highlighted the broader impact of Sprint's deal with Softbank.

"We believe Softbank's investment will spark further consolidation, likely starting with Sprint's acquisition of Clearwire (CLWR)," wrote Jonathan Chaplin, an analyst at Credit Suisse, in a note released on Monday. "New capital from Softbank will enable Sprint to accelerate consolidation of the industry."

Chaplin, who sees the deal as a positive for Sprint and other carriers, has an outperform rating on Sprint.

" The cash infusion gives Sprint the ability to look at Clearwire," added Mike McCormack, an analyst at Nomura Equity Research, in a note. "With an $8bn cash infusion, treating the convertible bond as equity, Sprint would immediately see its leverage level fall from 3.6x 2013 EBITDA to 2.1x, removing any doubt of the company's ability to fund the business and compete aggressively."

McCormack also noted that the deal allows Sprint to purchase the $1.6 billion un-owned Clearwire equity stake and refinance Clearwire's $4.2 billion of gross debt.

Sprint is Clearwire's largest shareholder, with a 48.1% stake in the Bellevue, Wash.-based company. Shares of LTE specialist Clearwire rose 12.07% to $2.60 in premarket trading on Monday.

AT&T shares dipped 0.03% to $35.62 before market open on Monday. Verizon shares crept up 0.18% to $44.7.

--Written by James Rogers in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

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