Sprint - Nextel 2015 Annual Report Download - page 56

Table of Contents
Upon closing of the transaction in May 2016, Sprint sold and leased-back approximately $1.3 billion in book value of leased devices for proceeds
totaling $1.1 billion (Cash Purchase Price) and a DPP of $186 million , which will be settled at the end of the arrangement and is subject to certain device losses
incurred by MLS.
Credit Facilities
BankCreditFacility
Our revolving bank credit facility that expires in February 2018 requires a 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 revolving bank credit facility (adjusted EBITDA), not to
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.
ExportDevelopmentCanada(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, leaving a principal balance of $300 million, which matures in December 2019. 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.
NewUnsecuredFinancingFacility
In April 2016, Sprint Communications entered into an unsecured financing facility for $2.0 billion . The terms of this facility provide for covenant
terms similar to those of the revolving bank credit facility, however, repayments of outstanding amounts cannot be re-drawn. The loan bears interest at a rate equal
to LIBOR plus a percentage that varies depending on the time of draw and matures in October 2017. Any amounts borrowed will be required to be repaid if certain
debt or equity securities are issued or certain asset sales occur, as set forth more specifically in the agreement. As of May 17, 2016 , no amounts had been drawn on
this facility.
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 .
Finnveraplc(Finnvera)
The Finnvera secured equipment credit facility provides for the ability to borrow up to $800 million to finance network-related purchases from Nokia.
The facility, which initially could be drawn upon as many as three consecutive tranches, now has one tranche remaining and available for borrowing through
October 2017. Such borrowings are contingent upon the amount and timing of Sprint's network-related purchases. During the year ended March 31, 2016 , we had
drawn $208 million on the facility, and we made principal repayments totaling $56 million , resulting in a total principal amount of $196 million outstanding at
March 31, 2016 .
K-sure
The K-Sure secured equipment credit facility provides for the ability to borrow up to $750 million to finance network-related purchases from Samsung.
The facility can be divided in up to three consecutive tranches of varying size with borrowings available until May 2018, contingent upon the amount of network-
related purchases made by Sprint. During the year ended March 31, 2016 , we had drawn $266 million on the facility, resulting in a total principal amount of $323
million outstanding at March 31, 2016 .
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