Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Credit Agreement
On January 24, 2020, Sprint Communications, Inc. ("Sprint Communications"), a
wholly subsidiary of Sprint Corporation (the "Company"), the Company, the
subsidiary guarantors party thereto, JPMorgan Chase Bank, N.A., as
administrative agent, and the lenders from time to time party thereto entered
into an amendment (the "Amendment") to the Credit Agreement, dated as of
February 3, 2017 (as amended, the "Credit Agreement"). The Credit Agreement
consists of a $2.0 billion revolving credit facility (the "Revolving Credit
Facility"), a $4.0 billion term loan facility and an aggregate of $2.0 billion
of incremental term loans. Pursuant to the Amendment, among other things,
effective January 24, 2020:
(i) the availability of commitments under the Revolving Credit Facility will
remain at $2.0 billion until the original maturity date of February 3, 2021,
while the availability of $1.8325 billion of commitments was extended to
February 3, 2022;
(ii) borrowings under the Revolving Credit Facility will accrue interest, at the
option of Sprint Communications, based on either (x) the Adjusted Base Rate (as
defined in the Credit Agreement) or (y) the Adjusted LIBO Rate (as defined in
the Credit Agreement), in each case, plus an applicable margin (A) with respect
to borrowings advanced by certain of the Revolving Credit Facility lenders based
on the ratio of total indebtedness to the trailing four quarters earnings before
interest, taxes, depreciation and amortization, as adjusted pursuant to the
Credit Agreement (the "Leverage Ratio") and ranging from a minimum of 0.75% to a
maximum of 1.75%, with respect to the Adjusted Base Rate, and a minimum of 1.75%
to a maximum of 2.75%, with respect to the Adjusted LIBO Rate and (B) with
respect to borrowings advanced by certain Revolving Credit Facility lenders
(a) for any day on or prior to June 30, 2020, based on the Leverage Ratio and
ranging from a minimum of 0.75% to a maximum of 1.75%, with respect to the
Adjusted Base Rate, and a minimum of 1.75% to a maximum of 2.75%, with respect
to the Adjusted LIBO Rate, (b) for any day after June 30, 2020 and on or prior
to June 30, 2021, equal to 2.5%, with respect to the Adjusted Base Rate, and
3.5%, with respect to the Adjusted LIBO Rate, and (c) for any day after June 30,
2021, equal to 3.5%, with respect to the Adjusted Base Rate, and 4.5%, with
respect to the Adjusted LIBO Rate; and
(iii) the maximum Leverage Ratio was amended to equal 3.75 to 1.00 for the
fiscal quarter ended December 31, 2019 and 6.0 to 1.0 for the fiscal quarter
ended March 31, 2020 and each fiscal quarter ending thereafter and the minimum
ratio of earnings before interest, taxes, depreciation and amortization, as
adjusted pursuant to the Credit Agreement, to total interest expense for the
trailing four quarters was amended to equal 3.25 to 1.00 for the fiscal quarter
ended December 31, 2019 and 2.00 to 1.00 for the fiscal quarter ended March 31,
2020 and each fiscal quarter ending thereafter.
In addition, pursuant to the Amendment, among other things, effective upon
receiving consents from the Required Lenders (as defined in the Credit
Agreement) the method of determining whether a lease constitutes a capital lease
or an operating lease under the Credit Agreement will be amended to reference
GAAP as in effect from time to time rather than as of February 3, 2017.
Amendment to Receivables Facility
On January 24, 2020, Sprint Spectrum L.P., a wholly owned subsidiary of the
Company, as initial servicer, certain Sprint special purpose entities, as
sellers, certain commercial paper conduits and financial institutions from time
to time party thereto, as purchaser agents, MUFG Bank, Ltd. f/k/a The Bank of
Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent, SMBC Nikko
Securities America, Inc., as administrative agent, and Mizuho Bank, Ltd., as
administrative agent and collateral agent, entered into the Third Amendment (the
"Receivables Facility Amendment') to the Third Amended and Restated Receivables
Purchase Agreement dated as of June 29, 2018 (as amended, the "Receivables
Facility").
Pursuant to the Receivables Facility Amendment, among other things:
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(i) the maturity date of the Receivables Facility was extended from February 3,
2021 to January 21, 2022; and
(ii) certain amendments to the Receivables Facility were made providing for the
determination of an alternate interest rate to the LIBO Rate (as defined in the
Receivables Facility) in the event of certain public statements or publications
to the effect that the administrator of LIBOR has ceased or will cease to
provide LIBOR or that LIBOR is no longer a representative interest rate
benchmark for U.S dollar-denominated syndicated credit facilities executed at
such time.
The foregoing descriptions of the Amendment and the Receivables Facility
Amendment do not purport to be complete and are qualified in their entirety by
reference to the Amendment and the Receivables Facility Amendment, respectively,
which are filed as Exhibits 10.1 and 10.2 hereto, respectively, and are
incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information provided in item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed with this report:
Exhibit
No. Description
10.1 Amendment, dated as of January 24, 2020, to Credit Agreement,
dated as of February 3, 2017, by and among Sprint Communications,
Inc., as Borrower, the guarantors party thereto, JPMorgan Chase
Bank, N.A., as Administrative Agent, and the lenders party
thereto.
10.2 Third Amendment, dated as of January 24, 2020, to Third Amended
and Restated Receivables Sale and Contribution Agreement, dated as
of June 29, 2018, by and among Sprint Spectrum L.P., as servicer,
certain Sprint Corporation subsidiaries, as originators and sellers,
and certain special purchase entities, as purchasers, certain
commercial paper conduits and financial institutions from time to
time party thereto, and Mizuho Bank, Ltd.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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