OVERLAND PARK, Kan., March 21, 2018 /PRNewswire/ -- Sprint Corporation (NYSE:S) announced today that three wholly owned special purpose subsidiaries (the "Issuers") have completed the previously announced offering (the "Offering") of $3,937,500,000 wireless spectrum-backed notes consisting of approximately $2.1 billion of Series 2018-1 4.738% Senior Secured Notes, Class A-1 (the "Class A-1 Notes"), and $1.8 billion of Series 2018-1 5.152% Senior Secured Notes, Class A-2 (the "Class A-2 Notes," and, together with the Class A-1 Notes, the "Notes"), in a private transaction that is exempt from the registration requirements of the Securities Act of 1933 (the "Securities Act"). The Class A-1 Notes and Class A-2 Notes have been issued at par, and provide for interest-only periods followed by quarterly amortization payments beginning on June 20, 2021 and June 20, 2023, weighted average lives of approximately 5.1 and 7.6 years and "anticipated repayment dates" of March 20, 2025 and March 20, 2028, respectively.
The Issuers' directly owned subsidiaries have acquired a portfolio of FCC licenses and a small number of third-party leased license agreements (the "Spectrum Portfolio") from subsidiaries of Sprint Communications, Inc., which comprise a portion of Sprint's 2.5GHz and 1.9GHz spectrum holdings, representing approximately 14 percent of Sprint's total spectrum holdings on a MHz-pops basis. The Spectrum Portfolio, which serves as collateral for the notes issued by the Issuers (and which is shared equally and ratably with the Notes), remains substantially identical to the original portfolio in October 2016.
"Sprint's turnaround in the past three years has been impressive, with the return to subscriber growth while simultaneously improving profitability," said Sprint President and CFO Michel Combes. "There is still additional opportunity to reduce our costs, operate more efficiently and get the right financial resources in order to reinvest in the company.
"With a stable balance sheet – a result of some innovative financing strategies in recent years – we continue to diversify our sources of capital to lower our interest expense and improve liquidity. The market demand for this latest offering was very positive, and we raised nearly $4 billion at an average rate of 4.93% to further lower our cost of debt and put us in a strong position to execute on our plan to significantly invest in our network. This investment combined with Sprint's spectrum holdings, richer and deeper than any company I have ever seen, give us a tremendous opportunity to build the first truly mobile 5G network."
The Notes have been rated investment grade by both Moody's (Baa2) and Fitch (BBB).
The Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption therefrom. The Notes have been offered only to Qualified Institutional Buyers as defined in Rule 144A under the Securities Act that are also Qualified Purchasers as defined under the Investment Company Act of 1940 and to persons outside the United States that are not U.S. Persons as defined in Regulation S under the Securities Act and are also Qualified Purchasers.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes and shall not constitute an offer, solicitation or sale of any Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.
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 54.6 million connections as of December 31, 2017 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. Today, Sprint's legacy of innovation and service continues with an increased investment to dramatically improve coverage, reliability, and speed across its nationwide network and commitment to launching the first 5G mobile network in the U.S. You can learn more and visit Sprint at www.sprint.com or www.facebook.com/sprint and www.twitter.com/sprint.
Cautionary Note Regarding Forward-Looking Statements
This release includes "forward-looking statements" within the meaning of the securities laws. The words "may," "could," "should," "estimate," "project," "forecast," "intend," "expect," "anticipate," "believe," "target," "plan," "outlook," "providing guidance," and similar expressions are intended to identify information that is not historical in nature. All statements that relate to our expectations regarding the Notes and the Offering are forward-looking statements. Forward-looking statements are estimates and projections reflecting management's judgment based on currently available information and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Sprint believes these forward-looking statements are reasonable; however, you should not place undue reliance on forward-looking statements, which are based on current expectations and speak only as of the date when made. Sprint undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our company's historical experience and our present expectations or projections. Factors that might cause such differences include, but are not limited to, those discussed in Sprint Corporation's Annual Report on Form 10-K for the fiscal year ended March 31, 2017. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
SOURCE Sprint Corporation