Sprint Closes on $2.1 Billion of Financing with Three New Vendor Financing Agreements and Existing Loan Expansion
OVERLAND PARK, Kan. (BUSINESS WIRE), January 07, 2015 - Sprint Corporation (NYSE: S) announced today that it has signed three new vendor financing facilities totaling $1.8 billion to purchase 2.5 GHz network equipment and related services from key suppliers. Sprint also amended and expanded by $300 million its credit relationship with Export Development Canada (EDC) as well as amended the terms of its existing secured equipment credit facility.
“These deals provide Sprint with greater flexibility and liquidity options as we focus on growing the business and investing in our network,” said Joe Euteneuer, Sprint’s Chief Financial Officer.
The three new vendor financing agreements are:
Each of these three new facilities is guaranteed by both Sprint Corporation and Sprint Communications, Inc., and the respective equipment purchases will serve as collateral. Interest will be variable, consisting of 6-month LIBOR plus a spread, depending on the particular facility.
In addition, ALU was also instrumental in arranging a $300 million incremental facility from EDC, maturing in Dec. 2019. This facility was extended through an amendment of the existing EDC facility, which was also amended to align its financial covenants with Sprint’s revolving credit facility and add Sprint Corporation as a guarantor. The total outstanding borrowings from EDC now amount to $800 million.
Sprint also amended the terms of the secured equipment credit facility that it used to finance $1 billion in purchases of network equipment and related services from Ericsson. The amendment of this facility aligned its financial covenants with those of Sprint’s revolving credit facility, and added Sprint Corporation as a guarantor. As of Sept. 30, 2014, this facility had an outstanding principal balance of $635 million after accounting for prior repayments, which will continue semi-annually until March 2017.
Finally, last month the Federal Communications Commission (FCC) approved Sprint’s request to reduce the Letter of Credit (LOC) for 800 MHz incumbent reconfiguration costs by an additional $22.6 million. This lowered the LOC to approximately $434 million and follows the FCC’s approval of a reduction from $850 million to $457 million earlier in 2014.
As of Sept. 30 2014, Sprint’s total cash, cash equivalents, and short-term investments were $5.3 billion and its total liquidity position was $8.8 billion.
Sprint (NYSE: S) is a communications services company that creates more and better ways to connect its customers to the things they care about most. Sprint served 55 million customers as of September 30, 2014 and is widely recognized for developing, engineering and deploying innovative technologies, including the first wireless 4G service from a national carrier in the United States; leading no-contract brands including Virgin Mobile USA, Boost Mobile, and Assurance Wireless; instant national and international push-to-talk capabilities; and a global Tier 1 Internet backbone. Sprint has been named to the Dow Jones Sustainability Index (DJSI) North America for the last four years. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.