AT&T Wireless

(AWE)

is slated to issue $4 billion to $5 billion worth of bonds via a private placement this week, as the nation's third-largest wireless carrier prepares to invest heavily in network upgrades.

The company, which

AT&T

(T) - Get Report

expects to

spin off as an independent company in mid-2001, will sell 10-year notes yielding 3.125 percentage points more than similar maturity U.S. Treasuries, five-year notes with a 0.35 percentage point smaller yield premium and 30-year bonds with a 0.3 to 0.35 percent larger yield premium, according to a report from

Reuters

.

"They're setting up their own capital structure," says Greg Gorbatenko, an analyst with

Loop Capital Markets

, of the bond issue. (He rates AT&T Wireless an attractive, and his firm has participated in underwriting for the company.)

He also points out that the company carries very little debt, and that another $4 billion to $5 billion is "not going to rock the boat." As a result, he predicts the bonds will find ready buyers, despite

investor wariness over telecom carriers. There are

fears that carriers will have to take on extraordinary amounts of debt to buy spectrum and upgrade their networks in order to provide high-speed data services, especially in Europe. Thus, there's been a distinct lack of enthusiasm for upcoming wireless investment opportunities, including the expected initial public offerings of

Verizon Wireless

and

Cingular Wireless

. (Cingular is a joint venture between

SBC Communications

(SBC)

and

BellSouth

(BLS)

and is expected to file for an IPO by the end of March.)

AT&T Wireless can use the money. Though

NTT DoCoMo

, Japan's largest wireless carrier,

invested $6.2 billion in the company last November, AT&T Wireless said last month that it will spend $5 billion in fiscal 2001 on an

upgrade to the world's most popular third-generation wireless standard, W-CDMA (wideband code division multiple access). Spending next year could be even higher if AT&T gets aggressive in its upgrades.

Shares of AT&T Wireless closed up 56 cents, or 3%, to $22.18 in regular Tuesday trading.