Sprint Nextel to price $3 billion perpetual convertible preferreds, talked 4.75%-5.25%, up 25%-30%

By Rebecca Melvin

New York, Aug. 6 - Sprint Nextel Corp. plans to price $3 billion of cumulative perpetual convertible preferreds with a liquidation preference price of $1,000 per preferred to yield 4.75% to 5.25% with an initial conversion premium of 25% to 30%, according to a syndicate source.

The Rule 144A deal, being sold via joint bookrunners Deutsche Bank, Goldman Sachs & Co., Citigroup and J.P. Morgan Securities Inc., is expected to price after the market close Thursday.

There is an over-allotment option of up to $450 million preferreds.

The perpetual preferreds have a soft call in year five at a pricing hurdle of 130%.

They will be convertible into shares of series 1 common stock of Sprint Nextel.

Proceeds are intended for general corporate purposes, which may include, among other things, debt reduction.

Based in Overland Park, Kan., Sprint Nextel is the third-largest wireless carrier in the United States.

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