United States Cellular Sells Senior Notes Maturing in 2064

A smallish U.S. cellular provider, United States Cellular (ticker:USM), did something more typical of the the telecommunications industry big boys by selling senior notes.

These so-called “baby bonds,” priced at $25/share for 7.25% Senior Notes, have a standard optional redemption period starting in 2020. But the bonds offer an unusually long maturity date that is way out to 12/1/2064.

This issue is NOT investment grade, but USM has two other issues of “baby bonds” outstanding which have traded very solidly, despite the longer-dated maturities. Last year, USM issued 7.25% senior notes that currently trade around $25.50. Additionally, there is a 6.95% issue outstanding that is trading around $25.32.

USM is a relative minnow ($4 billion in revenue) in the cellular service waters but it is nicely profitable.

While the long maturity date may dim the interest of many investors, the senior notes could be a match for someone with a very long-term investing horizon.

As with all baby bonds, the start of trading is not known, but it should be set in the next week.

Details of the issue are here.