T-Mobile USA, Inc. Announces Successful Consent Solicitations

T-Mobile USA, Inc. (the “Company“, “we” or “our“) announced today the expiration, on May 18, 2018, and results of the consent solicitations with respect to its (i) $1,300,000,000 aggregate principal amount of 6.000% Senior Notes due 2023 (the “2023 Notes“), (ii) $1,000,000,000 aggregate principal amount of 6.500% Senior Notes due 2024 (the “6.500% 2024 Notes“), (iii) $1,000,000,000 aggregate principal amount of 6.000% Senior Notes due 2024 (the “6.000% 2024 Notes“), (iv) $1,700,000,000 aggregate principal amount of 6.375% Senior Notes due 2025 (the “2025 Notes“), (v) $2,000,000,000 aggregate principal amount of 6.500% Notes due 2026 (the “2026 Notes” and, collectively with the 2023 Notes, the 6.500% 2024 Notes, the 6.000% 2024 Notes and the 2025 Notes, the “Pre-2017 Notes“), (vi) $500,000,000 aggregate principal amount of 4.000% Senior Notes due 2022 (the “2022 Notes“), (vii) $500,000,000 aggregate principal amount of 5.125% Senior Notes due 2025 (the “5.125% 2025 Notes“), (viii) $500,000,000 aggregate principal amount of 5.375% Senior Notes due 2027 (the “2027 Notes“), (ix) $1,000,000,000 aggregate principal amount of 4.500% Senior Notes due 2026 (the “4.500% 2026 Notes“) and (x) $1,500,000,000 aggregate principal amount of 4.750% Senior Notes due 2028 (the “2028 Notes“, and, collectively with the 2022 Notes, the 5.125% 2025 Notes, the 2027 Notes and the 4.500% 2026 Notes, the “Post-2017 Notes“, and the Post-2017 Notes, collectively with the Pre-2017 Notes, the “Notes“, and each series of the Notes, a “Series“), and receipt of the consents necessary to effect certain amendments to the indenture, dated as of April 28, 2013, between the Company and Deutsche Bank Trust Company Americas, as trustee (the “Trustee“), as supplemented by the applicable supplemental indentures pursuant to which the Notes were issued (as supplemented and amended, the “Indenture“).

The Consent Solicitations (as defined below) were conducted in connection with the previously announced agreement by T-Mobile US, Inc. (“T-Mobile“) to merge (the “Merger“) a wholly-owned subsidiary of T-Mobile with Sprint Corporation (“Sprint“), pursuant to that certain Business Combination Agreement (the “Business Combination Agreement“), dated as of April 29, 2018, among Sprint, T-Mobile, SoftBank Group Corp. (“SoftBank“), Deutsche Telekom AG and the additional parties thereto (the Merger, together with the other transactions contemplated by the Business Combination Agreement, the “T-Mobile/Sprint Transaction“).

Upon the terms and subject to the conditions described in the Consent Solicitation Statement, dated as of May 14, 2017 (the “Consent Solicitation Statement“), we (i) solicited consents (the “Ratio Secured Debt Consent Solicitation“) from holders of the Pre-2017 Notes to conform Section 4.09(b)(1) of the Indenture, as applicable to the Pre-2017 Notes, to Section 4.09(b)(1) of the Indenture, as applicable to the Post-2017 Notes, by increasing the amount of Indebtedness (as defined in the Indenture) under Credit Facilities (as defined in the Indenture) that can be incurred under Section 4.09(b)(1) from the greater of (x) $9.0 billion and (y) 150% of Consolidated Cash Flow (as defined in the Indenture, as applicable to the Pre-2017 Notes) to the greater of (x) $9.0 billion and (y) an amount that would not cause the Secured Debt to Cash Flow Ratio (as defined in the Indenture, as applicable to the Post-2017 Notes) (calculated net of cash and cash equivalents) to exceed 2.00x (the “Ratio Secured Debt Proposed Amendments“), and (ii) solicited consents (the “Existing Sprint Spectrum and GAAP Consent Solicitation“, and together with the Ratio Secured Debt Consent Solicitation, the “Consent Solicitations“) from holders of all Notes to (1) allow certain entities related to Sprint’s existing spectrum securitization notes program (the “Existing Sprint Spectrum Program“) to be non-guarantor Restricted Subsidiaries (as defined in the Indenture) and make certain other changes in connection therewith, provided that the principal amount of the spectrum notes issued and outstanding under the Existing Sprint Spectrum Program does not exceed $7.0 billion, and provided that the principal amount of such spectrum notes shall reduce the amount available under the Credit Facilities ratio basket, and (2) revise the definition of GAAP to mean generally accepted accounting principles as in effect from time to time, unless the Company elects to “freeze” GAAP as of any date, and to exclude the effect of changes in the accounting treatment of capital lease obligations (the amendments described in clauses (1) and (2), collectively, the “ExistingSprint Spectrum and GAAP Proposed Amendments“, and together with the Ratio Secured Debt Proposed Amendments, the “Proposed Amendments“).

In conjunction with receiving the requisite consents, on May 20, 2018, the Company, the guarantors and the Trustee executed and delivered the thirty-seventh supplemental indenture to the Indenture, pursuant to which, with respect to each applicable series of Notes, the applicable Proposed Amendments will become operative immediately prior to the consummation of the T-Mobile/Sprint Transaction. Except for the Proposed Amendments, all of the existing terms of the Notes and the Indenture will remain unchanged.

We will pay the applicable upfront payments reflected in the tables below (each an “Upfront Consent Payment” and, collectively, the “Upfront Consent Payments“) for each Series of Notes for the benefit of the applicable holders of such Series of Notes whose consents were validly delivered (and not revoked) prior to the expiration of the Consent Solicitations, on a pro rata basis for such Series of Notes. Payment will be made promptly after the date hereof, and is expected to be made on May 22, 2018. If the T-Mobile/Sprint Transaction is consummated, we will pay the applicable contingent payments reflected in the tables below (each a “Contingent Consent Payment” and, collectively, the “Contingent Consent Payments“; and the Contingent Consent Payments together with the Upfront Consent Payments, the “Aggregate Consent Payments“) for the benefit of the applicable holders of such Series of Notes whose consents were validly delivered (and not revoked) prior to the expiration of the Consent Solicitations, on a pro rata basis for such Series of Notes. Based on the consents received, the Upfront Consent Payments and Contingent Consent Payments were allocated to the consenting holders of each applicable series of Notes in the amounts set forth in the table below for each $1,000 principal amount of such series of Notes for which consents were validly delivered (and not revoked).

Ratio Secured Debt Proposed Amendments
Series of NotesCUSIP
Number
Outstanding
Principal
Amount
%
Principal
Amount
Consent
Received
Upfront
Payment
Approximate
Upfront
Payment per
$1,000
Principal
Amount of
Consenting
Notes
Contingent
Payment
Approximate
Contingent
Payment per
$1,000
Principal
Amount of
Consenting
Notes
6.000% Senior Notes due 202387264AAM7$1,300,000,00074.90%$3,250,000$3.34$6,500,000$6.68
6.500% Senior Notes due 202487264AAJ4$1,000,000,00083.38%$2,500,000$3.00$5,000,000$6.00
6.000% Senior Notes due 202487264AAQ8$1,000,000,00089.48%$2,500,000$2.79$5,000,000$5.59
6.375% Senior Notes due 202587264AAN5$1,700,000,00090.51%$4,250,000$2.76$12,750,000$8.29
6.500% Senior Notes due 202687264AAP0$2,000,000,00096.01%$5,000,000$2.60$25,000,000$13.02
Existing Sprint Spectrum and GAAP Proposed Amendments
Series of NotesCUSIP
Number
Outstanding
Principal
Amount
%
Principal
Amount
Consent
Received
Upfront
Payment
Approximate
Upfront
Payment per
$1,000
Principal
Amount of
Consenting
Notes
Contingent
Payment
Approximate
Contingent
Payment per
$1,000
Principal
Amount of
Consenting
Notes
6.000% Senior Notes due 202387264AAM7$1,300,000,00074.54%$1,625,000$1.68$4,875,000$5.03
6.500% Senior Notes due 202487264AAJ4$1,000,000,00085.89%$1,250,000$1.46$3,750,000$4.37
6.000% Senior Notes due 202487264AAQ8$1,000,000,00089.50%$1,250,000$1.40$3,750,000$4.19
6.375% Senior Notes due 202587264AAN5$1,700,000,00090.06%$2,125,000$1.39$6,375,000$4.16
6.500% Senior Notes due 202687264AAP0$2,000,000,00093.32%$2,500,000$1.34$7,500,000$4.02
4.000% Senior Notes due 202287264AAR6$500,000,00091.53%$625,000$1.37$1,875,000$4.10
5.125% Senior Notes due 202587264AAS4$500,000,00090.38%$625,000$1.38$1,875,000$4.15
5.375% Senior Notes due 202787264AAT2$500,000,00090.22%$625,000$1.39$1,875,000$4.16
4.500% Senior Notes due 202687264AAU9$1,000,000,00091.13%$1,250,000$1.37$3,750,000$4.12
4.750% Senior Notes due 202887264AAV7$1,500,000,00097.95%$1,875,000$1.28$5,625,000$3.83

There is no assurance that the T-Mobile/Sprint Transaction will be consummated and, accordingly, there is no assurance that the Contingent Consent Payments will be paid. The Contingent Consent Payment will not be paid with respect to any series of Notes that is no longer outstanding on the date of the consummation of the T-Mobile/Sprint Transaction. The Company will pay the Contingent Consent Payments promptly after the consummation of the T-Mobile/Sprint Transaction. Interest will not accrue on or be payable with respect to the Aggregate Consent Payments. The right to receive any Aggregate Consent Payment is not transferable.