Sprint Nextel has secured a new US$2.1bn credit facility to replace a similar US$4.5bn loan that was due to mature in December.
US wireless carrier Sprint has arranged the unsecured revolving credit facility with nine banks, JPMorgan Chase, Citigroup,…
Sprint Nextel has secured a new US$2.1bn credit facility to replace a similar US$4.5bn loan that was due to mature in December.
US wireless carrier Sprint has arranged the unsecured revolving credit facility with nine banks, JPMorgan Chase, Citigroup, Bank of America, Barclays, Deutsche Bank, Goldman Sachs, Wells Fargo, Bank of Nova Scotia and Northern Trust. The new loan expires in October 2013 and will be used to support the US$1.6bn letter of credit required by the Federal Communications Commission’s plan to reconfigure the 800 MHz band.
Having generated US$1.17bn of free cash flow in the preceding six months, the company started the second quarter of 2010 with US$4.4bn cash and equivalents, enabling it to downsize its credit terms. The new facility does not have an outstanding balance, but letters of credit reduce its available borrowing capacity.
The agreement includes a ratio of total indebtedness to trailing four-quarter EBITDA adjusted for certain other non-recurring charges to a maximum of 4.50 to 1 through March 2012, subsequently reduced to 4.25 to 1 through December 2012, and thereafter reduced to 4.0 to 1 for the remaining term.
The company simultaneously amended its US$750 million credit agreement with Export Development Canada, originally entered into in March 2007, to incorporate the same changes in covenants.
