S&P: Sprint Nextel notes B+

Standard & Poor's said it assigned a B+ rating and 3 recovery rating to Sprint Nextel Corp.'s proposed senior notes due 2022.

The proposed notes also were placed on CreditWatch with positive implications.

The 3 recovery rating indicates 50% to 70% expected recovery in a default.

The proceeds will be used to repay upcoming maturities, primarily at the Nextel Communications Inc. subsidiary.

The ratings, including the B+ corporate credit rating, remain on CreditWatch, where they were placed with positive implications in October.

Sprint Nextel has agreed to sell a 70% stake in itself to SoftBank Corp. for about $20 billion and the companies expect the transaction to close in the second quarter of 2013.

S&P said it will resolve the CreditWatch listing when the transaction closes.

The business benefits of the transaction will likely only occur over time in terms of cost savings on handsets and network equipment, the agency said, and as a result of greater financial flexibility allowing consistently higher investment in the business.

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