Cricket Communications amends loan to increase size, change covenants

By Sara Rosenberg

New York, July 25 - Cricket Communications Inc., a wholly owned subsidiary of Leap Wireless International Inc., amended its credit facility to increase the size by $100 million, accommodate its expansion plans and change financial covenants, according to an 8-K filed with the Securities and Exchange Commission Monday.

The $100 million incremental term loan carries an interest rate of Libor plus 250 basis points and contains substantially the same terms as the existing term loan.

Including this add-on, total amount of borrowings drawn to date under the credit facility are $600 million.

Furthermore, under the amendment the company increased the amount that it could invest in Alaska Native Broadband 1 LLC and Alaska Native Broadband 1 License LLC to $325 million from $100 million.

Lastly, the amendment increased the total leverage ratio to 5.5x from 5.0x, increased the senior secured leverage ratio to 3.5x from 3.0x upon the issuance of high-yield debt with the covenant stepping down to 3.0x after Jan. 10, 2009 compared to a step down to 2.5x in the original agreement, and permits the investment of up to $60 million in new joint ventures.

"We believe that the successful amendment of our senior secured credit facilities and additional $100 million term loan represents a strong endorsement from the capital markets and commitment of support from our lender group," said Dean Luvisa, acting chief financial officer and treasurer, in a company news release.

"Combined with the cash flows from our core operations, the additional term loan and liberalization of certain other terms in our credit agreement are expected to provide the company with the increased liquidity and financial flexibility to support the deliberate and strategic growth of our business."

The amendment was completed on Friday.

Bank of America is the administrative agent on the deal.

Leap is a San Diego-based provider of mobile wireless services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.