Each series of
T-Mobile
USA senior notes held by Deutsche Telekom was issued
pursuant to an indenture (the Indenture), dated as of April 28, 2013, among
T-Mobile
USA, the Company, the other guarantors party thereto, and Deutsche Bank Trust Company Americas, as trustee.
The Indenture, as amended and supplemented with respect to the notes, contains covenants that, among other things, restrict the ability of
T-Mobile
USA and its restricted subsidiaries to incur more debt, pay
dividends and make distributions, make certain investments, repurchase stock, create liens or other encumbrances, enter into transactions with affiliates, enter into agreements that restrict dividends or distributions from subsidiaries, and merge,
consolidate or sell, or otherwise dispose of, substantially all of their assets. The Indenture, as so amended and supplemented, also contains customary events of default. These covenants and events of default are subject to a number of important
qualifications and exceptions, including certain customary baskets, exceptions and incurrence-based ratio tests.
T-Mobile
USAs 4.000% Senior Notes due
2022-1,
6.000% Senior Notes due 2024, 5.125% Senior Notes due
2025-1,
4.500% Senior Notes due
2026-1,
5.375% Senior Notes due
2027-1
and 4.750% Senior Notes due
2028-1
held by Deutsche Telekom (collectively, the
Specified DT Notes) have substantially the same terms and conditions as
T-Mobile
USAs 4.000% Senior Notes due 2022, 6.000% Senior Notes due 2024, 5.125% Senior Notes due 2025, 4.500% Senior
Notes due 2026, 5.375% Senior Notes due 2027 and 4.750% Senior Notes due 2028 issued in public offerings (collectively, the Specified Public Notes), as applicable, other than issue date, registration rights and CUSIP. If
T-Mobile
USA exercises its rights in respect of Specified Public Notes,
T-Mobile
USA has agreed to exercise the same rights under the corresponding Specified DT Notes on an
equal and ratable basis.
On January 22, 2018,
T-Mobile
USA, the Company, and the other guarantors party thereto
entered into a purchase agreement with Deutsche Telekom (the Purchase Agreement), pursuant to which
T-Mobile
USA agreed to issue and sell to Deutsche Telekom, and Deutsche Telekom agreed to
purchase, $1.0 billion in aggregate principal amount of 4.500% Senior Notes due
2026-1
and $1.5 billion in aggregate principal amount of 4.750% Senior Notes due
2028-1
(collectively, the 2018 DT Notes) directly from
T-Mobile
USA.
T-Mobile
USA was not required to pay any upfront
fees, underwriting fees, new issuance concession or other consideration to Deutsche Telekom in connection with the issuance and sale of the 2018 DT Notes.
On
April 30, 2018, pursuant to the terms of the Purchase Agreement,
T-Mobile
USA issued to Deutsche Telekom the 2018 DT Notes and, contemporaneously with the issuance, redeemed through net settlement all of
the $1.25 billion in aggregate principal amount of 8.097% Senior Reset Notes due 2021 and all of the $1.25 billion in aggregate principal amount of 8.195% Senior Reset Notes due 2022. In connection with the exchange,
T-Mobile
USA paid Deutsche Telekom in cash the premium portion of the redemption price set forth in the indenture governing the reset notes, plus accrued but unpaid interest on such reset notes to, but not
including, the exchange date.
On March 28, 2019, T-Mobile USA issued a notice of redemption, pursuant to which the $600 million aggregate principal amount of
outstanding 9.332% Senior Reset Notes due 2023 has been called for redemption effective April 28, 2019.
Revolving Credit Facilities
On December 29, 2016,
T-Mobile
USA, the Company and the other guarantors party thereto entered into
(i) a $1.0 billion senior unsecured
revolving credit agreement with Deutsche Telekom, as administrative agent and lender (the unsecured revolving credit facility), and (ii) a $1.5 billion senior secured
revolving credit agreement with Deutsche Telekom, as administrative agent, collateral agent and lender (the secured revolving credit facility and, together with the unsecured revolving credit facility, the revolving credit
facilities).
Interest on outstanding borrowings and commitment fees under the revolving credit facilities are based on the Companys leverage profile,
which is determined on a quarterly basis in accordance with a debt to cash flow ratio.
The revolving credit facilities do not contain financial maintenance
covenants and only contain certain limited covenants on the Companys and
T-Mobile
USAs (and certain of their subsidiaries) ability to incur liens, sell assets and extend loans and/or
guaranties. The revolving credit facilities also contain customary events of default.
If Deutsche Telekom ceases to own and control more than 50% of the voting
stock of the Company,
T-Mobile
USA may draw any remaining capacity under the revolving credit facilities and (i) in the case of the secured revolving credit facility, at
T-Mobiles
option, convert the outstanding loans to secured term debt and/or issue senior unsecured notes to Deutsche Telekom in satisfaction of outstanding loans under the secured revolving credit
facility, in either case, with a tenor equal to the remaining tenor under the secured revolving credit facility, in an aggregate amount not to exceed the loans then outstanding under the secured revolving credit facility, and (ii) in the case
of the unsecured revolving credit facility, issue senior unsecured notes to Deutsche Telekom in satisfaction of the outstanding loans under the unsecured revolving credit facility, with a tenor equal to the remaining tenor under the unsecured
revolving credit facility in an aggregate amount not to exceed the loans then outstanding under the unsecured revolving credit facility.
The revolving credit
facilities are guaranteed by the same entities that guarantee
T-Mobile
USAs senior notes. The obligations of
T-Mobile
USA and the guarantors under the secured
revolving credit facility are secured by a first priority lien on substantially all of
T-Mobile
USAs and such guarantors assets, subject to certain exceptions. In addition,
T-Mobile
USAs obligations under the secured revolving credit facility are subject to a first priority pledge of the equity interests of
T-Mobile
USA and substantially
all of its direct and indirect subsidiaries, subject to certain exceptions.
On March 29, 2018, terms of the revolving credit facilities were amended to, among
other things, (i) amend the range of applicable margin payable under the secured revolving credit facility from 1.00%1.75% to 1.05%1.80%, (ii) amend the range of the applicable margin payable under the unsecured revolving
credit facility from 2.00%3.25% to 2.05%3.05%, (iii) amend the undrawn commitment fee applicable to the secured revolving credit facility from 0.25% to a range of 0.25%0.45%, (iv) amend the range of the undrawn commitment
fee applicable to the unsecured revolving credit facility from a range of 0.25%0.625% to a range of 0.20%0.575%, and (v) extend the maturity date of the revolving credit facilities from December 28, 2019 to December 29,
2020. The amendments also modified the revolving credit facilities to update certain covenants and other provisions to make them substantially consistent, subject to certain additional carveouts, with
T-Mobile
USAs 4.500% Senior Notes due 2026 and 4.750% Senior Notes due 2028 issued in January 2018.
On November 15, 2018, the termination date of the revolving
credit facilities was extended to December 29, 2021.
In 2018, we paid to Deutsche Telekom commitment fees of approximately $2.7 million and approximately
$13.6 million in interest on borrowings