Sprint - Nextel 2015 Annual Report Download - page 116

Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Notes
As of March 31, 2016 , our outstanding notes consisted of senior notes, guaranteed notes, and exchangeable notes, all of which are unsecured, as well
as secured notes of Clearwire Communications LLC, which are secured solely by assets of Clearwire Communications LLC and certain of its subsidiaries. Cash
interest on all of the notes is generally payable semi-annually in arrears. As of March 31, 2016 , $30.1 billion aggregate principal amount of the notes was
redeemable at the Company's discretion at the then-applicable redemption prices plus accrued interest.
As of March 31, 2016 , $21.6 billion aggregate principal amount 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 the applicable indentures and supplemental indentures) occurs. As of March 31, 2016 ,
$300 million aggregate principal amount of Clearwire Communications LLC notes provide holders with the right to require us to repurchase the notes if a change
of control occurs (as defined in the applicable indentures and supplemental indentures). If we are required to make such 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.
Upon the close of the Clearwire Acquisition, the Clearwire Communications, LLC 8.25% Exchangeable Notes due 2040 became exchangeable at any
time, at the holder’s option, for a fixed amount of cash equal to $706.21 for each $1,000 principal amount of notes surrendered. As a result, $444 million , which is
the total cash consideration payable upon an exchange of all $629 million principal amount of notes outstanding, is now classified as a current debt obligation. The
remaining carrying value of these notes is classified as a long-term debt obligation.
Credit Facilities
Bank credit facility
The Company has a $3.3 billion unsecured revolving bank credit facility that expires in February 2018. Borrowings under the revolving bank credit
facility bear interest at a rate equal to the London Interbank Offered Rate (LIBOR) plus a spread that varies depending on the Company’s credit ratings. As of
March 31, 2016 , approximately $320 million in letters of credit were outstanding under this credit facility, including the letter of credit required by the Report and
Order (seeNote13.CommitmentsandContingencies). As a result of the outstanding letters of credit, which directly reduce the availability of borrowings, the
Company had approximately $3.0 billion of borrowing capacity available under the revolving bank credit facility as of March 31, 2016 . The required ratio
(Leverage Ratio) of total indebtedness to trailing four quarters earnings before interest, taxes, depreciation and amortization and other non-recurring items, as
defined by the credit facility (adjusted EBITDA), may not exceed 6.25 to 1.0 through the quarter ending December 31, 2016 and 6.0 to 1.0 each fiscal quarter
ending thereafter through expiration of the facility. The facility allows us to reduce our total indebtedness for purposes of calculating the Leverage Ratio by
subtracting from total indebtedness the amount of any cash contributed into a segregated reserve account, provided that, after such cash contribution, our cash
remaining on hand for operations exceeds $2.0 billion . Upon transfer, the cash contribution will remain restricted until and to the extent it is no longer required for
the Leverage Ratio to remain in compliance.
EDC agreement
The unsecured EDC agreement provides for covenant terms similar to those of the revolving bank credit facility. However, under the terms of the EDC
agreement repayments of outstanding amounts cannot be re-drawn. In the quarter ended December 2015, we made a scheduled principal repayment of $500 million
. At the time of the repayment, the EDC agreement was also amended to increase the facility by $250 million through the addition of a new tranche due December
2017, which was fully drawn. Accordingly, as of March 31, 2016 , the total principal amount of our borrowings under the EDC facility was $550 million .
Secured equipment credit facilities
Eksportkreditnamnden(EKN)
The EKN secured equipment credit facility provides for covenant terms similar to those of the revolving bank credit facility. In 2013, we had fully
drawn and began to repay the EKN secured equipment credit facility totaling $1.0 billion , which was used to finance certain network-related purchases from
Ericsson. We made regularly scheduled principal repayments totaling $254 million during the year ended March 31, 2016 . The balance outstanding at March 31,
2016 was $254 million .
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