T-Mobile amends debt commitment to reduce term loan to $4 billion

By Sara Rosenberg

New York, Sept. 9 – T-Mobile USA Inc. amended and restated the commitment letter for the debt financing related to its merger with Sprint Corp. to reduce the term loan commitment amount to $4 billion from $7 billion and extend the commitment expiration date through May 1, 2020, according to an 8-K filed with the Securities and Exchange Commission on Monday.

The term loan is still expected to be covenant-lite, and have a seven-year maturity, 101 soft call protection for six months and amortization of 1% per annum.

As before, the credit facilities commitment also provides for a $4 billion five-year revolver.

Based on the revised and original commitment letters, pricing on the revolver is anticipated at Libor plus 125 basis points with a 0% Libor floor and pricing on the term loan is anticipated at Libor plus 175 bps with a 0% Libor floor.

Barclays, Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, Morgan Stanley Senior Funding Inc. and RBC Capital Markets are the joint lead arrangers on the credit facilities and joint bookrunners with BNP Paribas Securities Corp., Commerzbank, Credit Agricole, TD Securities (USA) LLC and Wells Fargo Securities LLC. Co-managers include Banco Santander, Societe Generale, SunTrust Robinson Humphrey Inc., NatWest and U.S. Bank.

The company still has a commitment for a $19 billion 364-day senior secured covenant-light bridge facility priced at Libor plus 125 bps with a 0% Libor floor. The spread will increase by 25 bps every three months.

The bridge loan is expected to be replaced with secured notes and/or other financing.

Proceeds from the debt will be used to refinance certain existing debt at T-Mobile and Sprint, and for post-closing working capital needs of the combined company.

Under the agreement, the companies will merge in an all-stock transaction at a fixed exchange ratio of 0.10256 T-Mobile shares for each Sprint share.

Closing is expected in the second half of 2019, subject to customary conditions.

T-Mobile is a Bellevue, Wash.-based provider of wireless services, Sprint is an Overland Park, Kan.-based communications services company. The combined company will be named T-Mobile and will have headquarters in Bellevue, Wash.

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