Sprint's $2.2 Billion Sale & Lease-Back Sent Shares Higher By Nearly 3%

Shares of Sprint Corp S spiked higher by nearly 3 percent in Wednesday's after-hours session as investors and traders found the company's sale and lease-back announcement to be encouraging.

Sprint announced it has entered into a transaction with several bankruptcy remote entities, "Network LeaseCo," for the sale and lease-back of some of its assets. The company stated the transaction will result in $2.2 billion of funding and will improve its liquidity position at an "attractive" cost of capital in the mid-single digits.

Network LeaseCo will also be backed by Sprint's parent company, SoftBank Group and other investors.

The entities will acquire several existing network assets and in return lease them back to Sprint. Essentially, the assets are being used as a form of collateral for a $2.2 billion raise which will be repaid back in staggered and unequal payments through January 2018.

The assets have a net book value of around $3 billion and consist mostly of equipment located at cell towers.

"Sprint and SoftBank have worked together again to create a unique structure that provides Sprint with an attractive source of capital," said Sprint CFO Tarek Robbiati. "This transaction is an important first step in addressing upcoming debt maturities and allows us to stay focused on our corporate transformation, which involves growing topline revenues and aggressively taking costs out of the business to improve operating cash flows."

Sprint's stock showed no trades early Thursday morning.