Sprint Will Get $1-Billion Loan

Sprint Corp. said it had lined up a $1-billion bank loan, helping allay investor fears of an imminent cash crunch. Its shares rose as much as 7%.

To obtain the loan from Citibank and Deutsche Bank, Sprint pledged its phone directory publishing business as collateral. It hired the banks’ investment banking arms to help it explore the possible sale of the business.

Kansas City, Mo.-based Sprint also said it planned to extend its accounts receivable program to include receivables of its Sprint PCS Group Inc. wireless telephone unit, giving it access to more than $500 million of additional cash.

Sprint shares have fallen this year on fears that the company would be shut out of the commercial paper market and forced to tap its $5-billion bank credit line, usually a last resort.

Shares of Sprint fell 20 cents to $12.48, while Sprint PCS shares fell 42 cents to $8.83, both on the NYSE.