TEXT - S&P may raise Clearwire Corp ratings

Thu Dec 13, 2012 4:51pm EST

Overview
     -- Sprint Nextel Corp. is offering to purchase the remaining 49% stake in 
Clearwire Corp. that it does not own for around $2.1 billion.
     -- We are placing our ratings on Clearwire, including the 'CCC' corporate 
credit rating, on CreditWatch with positive implications.
     -- We believe that an upgrade would likely be limited to one notch absent 
a guarantee of Clearwire's debt by Sprint Nextel.

Rating Action
On Dec. 13, 2012, Standard & Poor's Ratings Services placed its 'CCC' 
corporate credit rating, and all other ratings, on Bellevue, Wash.-based 
wireless service provider Clearwire Corp. on CreditWatch with positive 
implications. 

Rationale
The CreditWatch listing follows Sprint Nextel Corp.'s (B+/Watch Pos/--) offer 
to purchase the remaining 49% that it does not already own of Clearwire for 
about $2.1 billion. It will provide about $800 million of interim financing, 
which will be used to fund operations and the build-out of Clearwire's 
Long-Term Evolution (LTE) network. Including Clearwire's debt, we believe the 
transaction is valued at around $6 billion. 

The CreditWatch listing reflects the possibility that we could raise the 
ratings if Sprint Nextel is successful in its bid to acquire the remaining 
stake in Clearwire. Sprint Nextel signed an agreement to sell a 70% stake in 
the company to Japan-based SoftBank Corp. (BBB/Watch Neg/--), which will 
include an $8 billion cash infusion. We believe an upgrade of Clearwire would 
likely be limited to one notch absent a guarantee of Clearwire's debt by 
Sprint Nextel.

Clearwire is building a fourth-generation wireless network using a technology 
known as Time Division (TD)-LTE in the 2.5 GHz spectrum band, which is 
compatible with Softbank's TD-LTE network in Japan. We believe that it has 
become more evident that Clearwire is important to SoftBank's long-term 
strategy in the U.S. because Clearwire's large spectrum position in 
frequencies similar to that of Softbank's will have some potential value for 
Softbank in equipment and technology development. Additionally, an acquisition 
of Clearwire could help improve the ecosystem for wireless devices on a TD-LTE 
network and reduce related handset costs. 

CreditWatch
As part of our CreditWatch, we will monitor discussions between the two 
companies regarding the acquisition offer. We could raise or affirm the 
ratings on Clearwire if an acquisition is ultimately completed, depending 
partly on how any transaction is structured. We believe an upgrade would 
likely be limited to one notch, absent a guarantee of Clearwire's debt by 
Sprint Nextel. Even if the reported talks do not lead to an acquisition in the 
near term, we believe there is a greater rationale for some additional funding 
being provided to Clearwire based on our view of the potential importance of 
Clearwire to SoftBank's long-term strategy. Such strategic considerations or 
improved liquidity could also result in a moderate ratings uplift for 
Clearwire.


Related Criteria And Research
     -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
     -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008
     -- 2008 Corporate Criteria: Ratios And Adjustments, April 15, 2008



Temporary contact number: Allyn Arden (917-882-2541)

Ratings List

Ratings Affirmed; Recovery Ratings Unchanged; CreditWatch Action
                                        To                 From
Clearwire Corp.
 Corporate Credit Rating                CCC/Watch Pos/--   CCC/Developing/--

Clearwire Communications LLC
Clearwire Finance Inc.
 Senior Secured                         CCC/Watch Pos      CCC
  Recovery Rating                       4                  4
 Senior Secured                         CC/Watch Pos       CC
  Recovery Rating                       6                  6
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