You can’t pull money out of thin air, but that’s what Sprint Corp. appears to be doing by entering into a sale-and-leaseback agreement for a portfolio of licenses granted by the U.S. government. Of course, it’s not really free money, since Sprint had to pay for the licenses. But just as some companies sell their corporate headquarters to investors and lease them back, the transaction frees up a lot of capital – as much as $7 billion.

The move is also quite a hat trick, in that it gives the company a substantial ratings uplift. The initial $3.5 billion of notes that priced Thursday are rated triple-B by Moody’s Investors Service and Fitch Ratings; they have a weighted average life of approximately three years and a coupon of 3.36%. That’s some 300 basis points less than what the single-B rated Sprint would pay if it had to issue more junk bonds.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.