Wireless Telcos Tapping Junk Bond Market for Cash

After a dearth of financing opportunities for the better part of a year, wireless service providers are finding an opening -- in the form of the junk-bond market. Just in time, too, because they've got a great need for capital if their businesses are going to grow.

A host of corporations in a wide range of industries have taken advantage of the Federal Reserve's surprise reduction of the Fed funds rate by half a percentage point earlier this month, a move that enables them to borrow more cheaply.

Nextel Communications (NXTL Quote), the nation's fifth-largest provider of wireless telecommunications service, recently availed itself of this window, issuing $1.25 billion worth of junk, or high-yield, bonds in a private placement. The 10-year senior notes carry a coupon of 9.5%. ...