Moody's rates T-Mobile notes Ba3

Moody's Investors Service said it assigned Ba3 (LGD4, 52%) ratings to T-Mobile USA, Inc.'s $1 billion 6 1/8% senior notes due 2022 and $1 billion 6½% senior notes due 2024. The company's other ratings and stable outlook are unchanged.

The proceeds of the notes and the company's recent equity offering are expected to be used for general corporate purposes, including capital investments, enhancing T-Mobile's financial flexibility and opportunistically acquiring additional spectrum in private-party transactions and/or government auctions.

T-Mobile's Ba3 corporate family rating reflects the agency's expectation for improved execution as a result of enhanced scale, an improved competitive device lineup, accelerated network investment and a new, aggressive pricing structure for smartphones. In addition, a strong liquidity profile and valuable spectrum assets also provide credit support, Moody's said.

In the agency's view, these strengths are offset by the company's fourth position in the highly competitive U.S. wireless industry, the capital intensity associated with building out its 4G LTE network and meeting rapidly rising bandwidth demand and a moderately leveraged balance sheet.

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