T-Mobile gains approval to amend 10 notes for merger with Sprint

New York, May 21 – T-Mobile USA, Inc. said it received the requested consents for 10 series of its notes in connection with its planned merger with Sprint Corp.

The consent solicitations ended at 5 p.m. ET on May 18.

Following the receipt of consents, T-Mobile executed a supplemental indenture for the notes on May 20 and plans to make the upfront consent payment on May 22, according to a news release.

The contingent consent payment is dependent on the closing of the merger, and the indenture changes will become operative immediately prior to completion of the merger.

As announced on May 14, the solicitation consists of a ratio secured debt consent solicitation and an existing Sprint spectrum and GAAP consent solicitation.

For the pre-2017 notes, the company is seeking consents under ratio secured debt consent solicitation to conform a section of the indenture to that of the post-2017 notes by increasing the amount of debt under credit facilities that can be incurred to the greater of $9 billion and an amount that would not cause the secured debt to cash flow ratio to exceed 2 times from the greater of $9 billion and 150% of consolidated cash flow.

For all of the notes, the company is asking for approval under the existing Sprint spectrum and GAAP consent solicitation for the following: to allow some entities related to Sprint's existing spectrum securitization notes program to be non-guarantor restricted subsidiaries and make some other changes in connection with, provided that the principal amount of the spectrum notes issued and outstanding under the existing Sprint spectrum program does not exceed $7 billion, and provided that the principal amount of the spectrum notes will reduce the amount available under the credit facilities ratio basket; and to revise the definition of GAAP to mean generally accepted accounting principles as in effect from time to time, unless the company elects to "freeze" GAAP as of any date, and to exclude the effect of changes in the accounting treatment of capital lease obligations.

The notes covered by the consent solicitation with consent fees and the response to the solicitation are as follows:

• $1.3 billion principal amount of 6% senior notes due 2023 with an upfront payment of $3.25 million and a contingent payment of $6.5 million for the ratio secured amendments; and an upfront payment of $1,625,000 and a contingent payment of $4,875,000 for Sprint spectrum and GAAP amendments. Consents were received for 74.90% of the notes for the ratio secured amendments resulting in an upfront payment of $3.34 per $1,000 principal amount and a contingent payment of $6.68 per $1,000 principal amount. Consents were also received for 74.54% of the notes for the spectrum and GAAP amendments resulting in an upfront payment of $1.68 per $1,000 principal amount and a contingent payment of $5.03 per $1,000 principal amount;

• $1 billion principal amount of 6½% senior notes due 2024 with an upfront fee of $2.5 million and a contingent fee of $5 million for the ratio changes; and an upfront fee of $1.25 million and a contingent fee of $3.75 million for the Sprint spectrum and GAAP amendments. Consents were received for 83.38% of the notes for the ratio secured amendments resulting in an upfront payment of $3.00 per $1,000 principal amount and a contingent payment of $6.00 per $1,000 principal amount. Consents were also received for 85.59% of the notes for the spectrum and GAAP amendments resulting in an upfront payment of $1.46 per $1,000 principal amount and a contingent payment of $4.37 per $1,000 principal amount;

• $1 billion principal amount of 6% senior notes due 2024 with an upfront fee of $2.5 million and a contingent fee of $5 million for the ratio changes; and an upfront fee of $1.25 million and a contingent fee of $3.75 million for the Sprint spectrum and GAAP amendments. Consents were received for 89.48% of the notes for the ratio secured amendments resulting in an upfront payment of $2.79 per $1,000 principal amount and a contingent payment of $5.59 per $1,000 principal amount. Consents were also received for 89.50% of the notes for the spectrum and GAAP amendments resulting in an upfront payment of $1.40 per $1,000 principal amount and a contingent payment of $4.19 per $1,000 principal amount;

• $1.7 billion principal amount of 6 3/8% senior notes due 2025 with an upfront fee of $4.25 million and a contingent fee of $12.75 million for the ratio changes; and an upfront fee of $2,125,000 and a contingent fee of $6,375,000 for the Sprint spectrum and GAAP amendments. Consents were received for 90.51% of the notes for the ratio secured amendments resulting in an upfront payment of $2.76 per $1,000 principal amount and a contingent payment of $8.29 per $1,000 principal amount. Consents were also received for 90.06% of the notes for the spectrum and GAAP amendments resulting in an upfront payment of $1.39 per $1,000 principal amount and a contingent payment of $4.16 per $1,000 principal amount;

• $2 billion principal amount of 6½% notes due 2026 with an upfront fee of $5 million and a contingent fee of $25 million for the ratio changes; and an upfront fee of $2.5 million and a contingent fee of $7.5 million for the Sprint spectrum and GAAP amendments. Consents were received for 96.01% of the notes for the ratio secured amendments resulting in an upfront payment of $2.60 per $1,000 principal amount and a contingent payment of $13.02 per $1,000 principal amount. Consents were also received for 93.32% of the notes for the spectrum and GAAP amendments resulting in an upfront payment of $1.34 per $1,000 principal amount and a contingent payment of $4.02 per $1,000 principal amount;

• $500 million principal amount of 4% senior notes due 2022 with an upfront fee of $625,000 and a contingent fee of $1,875,000 for the Sprint spectrum and GAAP amendments. Consents were received for 91.53% of the notes resulting in an upfront payment of $1.37 per $1,000 principal amount and a contingent payment of $4.10 per $1,000 principal amount;

• $500 million principal amount of 5 1/8% senior notes due 2025 with an upfront fee of $625,000 and a contingent fee of $1,875,000 for the Sprint spectrum and GAAP amendments. Consents were received for 90.38% of the notes resulting in an upfront payment of $1.38 per $1,000 principal amount and a contingent payment of $4.15 per $1,000 principal amount;

• $500 million principal amount of 5 3/8% senior notes due 2027 with an upfront fee of $625,000 and a contingent fee of $1,875,000 for the Sprint spectrum and GAAP amendments. Consents were received for 90.22% of the notes resulting in an upfront payment of $1.39 per $1,000 principal amount and a contingent payment of $4.16 per $1,000 principal amount;

• $1 billion principal amount of 4½% senior notes due 2026 with an upfront fee of $1.25 million and a contingent fee of $3.75 million for the Sprint spectrum and GAAP amendments. Consents were received for 91.13% of the notes resulting in an upfront payment of $1.37 per $1,000 principal amount and a contingent payment of $4.12 per $1,000 principal amount; and

• $1.5 billion principal amount of 4¾% senior notes due 2028 with upfront fee of $1,875,000 and contingent fee of $5,625,000 for the Sprint spectrum and GAAP amendments. Consents were received for 97.95% of the notes resulting in an upfront payment of $1.28 per $1,000 principal amount and a contingent payment of $3.83 per $1,000 principal amount.

For the amendments to pass, the company needed support from holders of a majority of each series of pre-2017 notes for the ratio secured debt amendments and each series of notes for the Sprint spectrum and GAAP amendments.

The solicitation agent is Deutsche Bank Securities Inc. (855 287-1922 or 212 250-7527). The information and tabulation agent is D.F. King & Co., Inc. (212 269-5550, 800 676-7437 or tmobile@dfking.com).

T-Mobile is a Bellevue, Wash.-based wireless communications provider. It is a direct wholly owned subsidiary of T-Mobile US, Inc.

Sprint is an Overland Park, Kan., telecommunications company.

© 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.