Carriers Issue Billions in Debt As Spectrum Auction Bids Top $36 Billion

As bids in an unexpectedly hot auction for US wireless spectrum topped $36 billion, carriers went about issuing billions of dollars in debt for when the time comes to pay for it.

Verizon Communications outlined plans to raise 2.4 billion euros in debt citing spectrum as a use of the funds. Smaller carrier US Cellular said it plans to raise up to $500 million in new debt to pay for spectrum purchases among other purposes. Chief Executive Kenneth Meyers said the company’s existing financial resources, though strong, “may not be sufficient to fund all of the long-term investments that the company is making.” Companies seeking a piece of the new spectrum will need to line up extra cash in advance. Winning bidders will owe a 20% down payment on their new licenses by Jan. 7 or 10 days after the auction ends, whichever is latest. Final payments are due the later of Jan. 21 or 10 days after down payments come due.