In February, Verizon Communications Inc. pledged $45.5 billion during the U.S. government auction, claiming over half of the wireless spectrum licenses available. The company also committed roughly $8 billion in additional clearing payments to help existing license users move to other bands, reported the Wall Street Journal. Verizon plans to use the spectrum to build out its 5G offerings.
Now, Verizon is raising $25 billion in new debt to help cover the costs. The carrier already paid the first installment of $8.2 billion to the U.S. Treasury. According to Verizon Chief Financial Officer Matthew Ellis, it will use proceeds of a bond sale launched last week to pay approximately $36.4 billion owed to the Treasury by March 24.
Ellis added that Verizon “theoretically” has enough funds to pay the Commission without the bond sale and agreed to a $25 billion term loan facility with a consortium of banks that it can draw down on if needed. The carrier also has some money left from a $12 billion bond sale that took place in November 2020 and could use those funds for the second federal government payment, he said.
Verizon announced to investors last week that it plans a total of $10 billion in capital expenditures for expanding its midband, or C-band, range over the next three years, reported the Wall Street Journal. Ellis said, “Cash generation will take care of these investments.”
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