Sprint secures vendor financing worth USD1.8bn

8 Jan 2015

US mobile giant Sprint Corp has announced that it has signed three new vendor financing facilities totalling USD1.8 billion which will allow it to purchase 2.5GHz network equipment and related services from key suppliers. Sprint has also amended and expanded its credit relationship with Export Development Canada (EDC) by USD300 million. The three new financing agreements are as follows:

• A secured facility for up to USD800 million from Nokia Networks maturing in June 2021. It is backed by credit insurance provided by Finnvera, the export credit agency of Finland;

• A secured facility for up to USD750 million from Samsung maturing in December 2022. It is backed by credit insurance provided by the Korea Trade Insurance Corporation (Ksure), the export credit agency of Korea; and

• A secured facility for up to USD250 million from Alcatel-Lucent maturing in December 2021. It is backed by credit insurance provided by Delcredere/Ducroire (D/D), the export credit agency of Belgium.

Sprint also notes that has amended the terms of the secured equipment credit facility that it used to finance USD1 billion in purchases of network equipment and related services from Ericsson. The amendment of this facility aligned its financial covenants with those of Sprint’s revolving credit facility, and added Sprint Corporation as a guarantor. As of 30 September 2014, this facility had an outstanding principal balance of USD635 million after accounting for prior repayments, which will continue semi-annually until March 2017.

In a related development, last month the Federal Communications Commission (FCC) approved Sprint’s request to reduce the Letter of Credit (LOC) for ‘800MHz incumbent reconfiguration costs’ by an additional USD22.6 million. This lowered the LOC to approximately USD434 million and follows the FCC’s approval of a reduction from USD850 million to USD457 million earlier in 2014.