Second Mobile Leasing Solutions, LLC transaction provides $1.1
billion of funding
New bridge financing facility of $2 billion
Company has added more than $5 billion of liquidity in April
Company Website:
http://www.sprint.com
OVERLAND PARK, Kan. -- (Business Wire)
Sprint Corporation (NYSE:S)
signed its second deal with Mobile Leasing Solutions, LLC (MLS) for the
sale and lease-back of certain leased devices. Arranged by Mizuho
Securities, Co., LTD, this transaction is expected to provide the
company with approximately $1.1 billion in cash proceeds. In a separate
transaction, the company signed an 18-month bridge financing facility
arranged by Mizuho Bank, LTD, providing $2 billion of additional
liquidity. These transactions, in addition to the $2.2 billion of
network-related financing that was announced earlier this month, have
improved the company’s liquidity position by more than $5 billion in
April.
Second MLS Transaction
By executing its second transaction with MLS, Sprint continues to help
mitigate the working capital impacts associated with leasing devices to
its customers. The company sold approximately $1.3 billion of leased
device assets for approximately $1.1 billion of cash proceeds, which the
company expects to receive in the coming weeks, and $186 million of
contingent deferred consideration.
In contrast with the first MLS transaction, this sale lease-back
arrangement will be accounted for as financing (on-balance sheet).
Accordingly, the assets will remain in Property, Plant, & Equipment and
will continue to be depreciated over their remaining useful lives. The
payments made to MLS under the lease-backs will be reflected as
principal repayments and interest expense over the respective terms.
Future changes in the fair value of the financing obligation will be
recognized in earnings over the course of the arrangement.
MLS was formed by a group of equity investors including SoftBank and has
obtained debt financing from several lenders including leasing companies
and international and domestic banks. As with the first transaction,
Brightstar Corp is providing its lease management and asset tracking
system, as well as reverse logistics and device remarketing services.
Also consistent with the first transaction, MLS executed a forward
purchase agreement with Foxconn, which helps reduce the downside risk of
future changes in device residual values.
Bridge Financing Facility
The 18-month bridge financing facility was arranged by Mizuho Bank, LTD
and provides Sprint with $2 billion of liquidity as the company
continues to execute its turnaround initiatives, densify and optimize
its network, and progress towards other financing transactions in the
future. The bridge facility contains a feature that permits the company
to add up to $500 million in additional commitments.
The company is scheduled to release its fiscal year 2015 fourth quarter
and full year results on Tuesday, May 3, 2016 and will address
additional questions at that time.
Safe Harbor
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,” “providing guidance,” and similar expressions are
intended to identify information that is not historical in nature. All
statements that address operating performance, events or developments
that we expect or anticipate will occur in the future — including
statements relating to the transactions and statements expressing
general views about future operating results — 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. With respect to these forward-looking
statements, management has made assumptions regarding, among other
things, ability to recognize the expected benefits of the transactions;
availability of devices; availability of various financings, including
any additional leasing transactions; and the timing of various events.
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, 2015, and, when filed, its
Annual Report on Form 10-K for the fiscal year ended March 31, 2016. 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.
About Sprint
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 more than 58.4 million connections as of December
31, 2015 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. Sprint has been
named to the Dow Jones Sustainability Index (DJSI) North America for the
past five years. You can learn more and visit Sprint at www.sprint.com
or www.facebook.com/sprint
and www.twitter.com/sprint.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160429005235/en/
Contacts:
Media:
Sprint
Dave Tovar, 913-315-1451
David.Tovar@sprint.com
or
Investors:
Jud
Henry, 800-259-3755
Investor.Relations@sprint.com
Source: Sprint Corporation
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