Sprint - Nextel 2012 Annual Report Download - page 143

Table of Contents
SPRINT NEXTEL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2012 , approximately $19.8 billion of the notes were redeemable at the Company's discretion at the then - applicable redemption prices plus accrued
interest.
As of
December 31, 2012 , approximately $11.1 billion of our senior notes and guaranteed notes provide holders with the right to require us
to repurchase the notes if a change of control triggering event (as defined in our indentures and supplemental indentures governing applicable notes)
occurs, which includes both a change of control and a ratings decline of the applicable notes by each of Moody's Investor Services and Standard &
Poor's Rating Services. If we are required to make a change of control offer, we will offer a cash payment equal to
101% of the aggregate principal
amount of notes repurchased plus accrued and unpaid interest. A change in control resulting from the Softbank Merger has been excluded as a
triggering event for the $11.1 billion of our senior and guaranteed notes subject to both a change in control and ratings decline.
Debt Issuances
On November 9, 2011, the Company issued
$1.0 billion in principal of 11.50% senior notes due 2021 and $3.0 billion in principal of 9.00%
guaranteed notes due 2018. Interest is payable semi
- annually on May 15 and November 15. The Company, at its option, may redeem some or all of
either issue of the notes at any time prior to maturity. The 2018 Guaranteed Notes are guaranteed by the Company's subsidiaries that guarantee its
revolving bank credit facility and its facility with EDC.
On March 1, 2012, the Company issued
$1.0 billion aggregate principal amount of 9.125% senior notes due 2017 and $1.0 billion aggregate
principal amount of 7.00% guaranteed notes due 2020. Interest is payable semi - annually on March 1 and September 1. The Company, at its option, may
redeem some or all of either series of the notes at any time prior to maturity. The 2020 guaranteed notes are guaranteed by the Company's subsidiaries
that guarantee its revolving bank credit facility and its facility with EDC.
On August 14, 2012, the Company issued
$1.5 billion aggregate principal amount of 7.00% senior notes due 2020. Interest is payable semi -
annually on February 15 and August 15. The Company, at its option, may redeem some or all of the notes at any time prior to maturity.
On October 22, 2012, the Company issued a convertible bond (Bond) to Starburst II, Inc., a Delaware corporation and a wholly
- owned
subsidiary of SoftBank, with a face amount of
$3.1 billion , stated interest rate of 1%, and maturity date of October 15, 2019, which is convertible into
590,476,190 shares of Sprint common stock at $5.25 per share, or approximately 16.4% upon conversion of the Bond (based on Sprint common shares
outstanding as of December 31, 2012 ), subject to adjustment in accordance with the terms of the Bond Agreement. The closing price of Sprint's
common stock at the date of the bond issuance was
$5.68 , which was greater than the conversion price. This resulted in an initial beneficial conversion
feature at an intrinsic value of
$254 million which was recognized as a discount on the debt and additional paid - in capital. This discount will be
accreted through the stated redemption date of the debt. If the bonds are converted prior to the bond redemption date, any unamortized discount will
be recorded as interest expense immediately upon conversion. Interest on the Bond will be due and payable in cash semiannually in arrears on April 15
and October 15 of each year, commencing on April 15, 2013. Upon receipt of regulatory approval, the Bond will be converted into Sprint shares
immediately prior to consummation of the merger and may not otherwise be converted prior to the termination of the Merger Agreement. Conversion of
the Bond is subject in any case to receipt of any required approvals and, subject to certain exceptions, to receipt of waivers under the Company's
existing credit facilities. Subject to certain exceptions, SoftBank may not transfer the Bond without Sprint's consent.
On November 14, 2012, the Company issued
$2.28 billion aggregate principal amount of 6.00% senior notes due 2022. Interest is payable
semi - annually on May 15 and November 15. The Company, at its option, may redeem some or all of the notes at any time prior to maturity.
Debt Redemptions
On January 31, 2011, the Company paid
$1.65 billion in principal plus accrued and unpaid interest on its outstanding Sprint Capital
Corporation
7.625% senior notes as scheduled. In addition, on December 29, 2011, we redeemed all of our outstanding $2.0 billion Sprint Capital
Corporation 8.375% senior notes due March 2012 for
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