Fitch might raise Sprint

Fitch Ratings said it placed the B+ long-term issuer default ratings and outstanding debt of Sprint Corp. and its subsidiaries on rating watch positive.

The transaction, as proposed, is likely to lead to a three-notch upgrade of the issuer default ratings and outstanding debt of Sprint based on existing assumptions.

Fitch said the actions follows Sprint’s and T-Mobile US Inc.'s announcement that the companies entered into definitive agreements to merge operations through an all-stock transaction with an exchange ratio of 9.75 Sprint shares for each T-Mobile share.

The agency believes the merger will substantially strengthen the credit support for existing Sprint bondholders.

The combination is expected to create significant scale, asset and synergy benefits that should materially improve the combined entities' long-term competitive position, Fitch added.

The transaction is expected to close by the first half of 2019.

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