NEW YORK — Qwest Communications International Inc. is preparing to sell $2 billion worth of bonds this week in what analysts say is only the tip of the iceberg of debt sales by telecommunications companies.
Experts say Qwest, based in Denver, has timed its offering to come before a multibillion-dollar flood of telecom debt pours into the market in late August, September and October. Much of that issuance is expected to be used to pay for the purchase of wireless telecom licenses in Europe and the United States.
Qwest's offering, to be privately placed, will include six-year and 10-year classes.
Analysts expect the six-year notes to price at a yield margin of 1.70 to 1.75 percentage points over comparable Treasuries and the 10-year to price to yield between 1.90 and 2.00 percentage points more than Treasuries.
Qwest will use the money it raises to refinance existing commercial paper debt, said Scott Berman, head of the capital markets group at Qwest. The deal is expected to be launched Wednesday and be priced either Wednesday or Thursday, Berman said.
Berman said Qwest chose to issue this week because of improved market conditions. He said the financing isn't related to upcoming U.S. wireless auctions.
Analysts, however, didn't rule out Qwest as a possible participant in the auctions, as the company is expected to expand its presence as a regional wireless service provider.