Clearwire 2008 Annual Report Download - page 113

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m
arg
i
n
i
ncreases w
ill b
e paya
bl
e
i
n cas
h
or paya
bl
e
i
n
ki
n
db
y cap
i
ta
li
z
i
ng t
h
ea
ddi
t
i
ona
li
nterest an
d
a
ddi
ng
i
ttot
he
outstan
di
ng pr
i
nc
i
pa
l
amount o
f
t
h
e Sen
i
or Term Loan Fac
ili
ty. On t
h
e secon
d
ann
i
versary o
f
t
h
eC
l
os
i
ng, t
h
e
applicable mar
g
in rate will increase to 14.00% per annum for LIBOR-based loans and for alternate base rate loans
th
e app
li
ca
bl
e marg
i
n rate w
ill i
ncrease to 13.00% per annum. Interest
i
s paya
bl
e quarter
l
yw
i
t
h
respect to a
l
ternate
b
ase rate
l
oans, an
d
w
i
t
h
respect to LIBOR-
b
ase
dl
oans,
i
nterest
i
s paya
bl
e
i
n arrears at t
h
een
d
o
f
eac
h
app
li
ca
bl
e
p
eriod, but at least ever
y
three months. In addition, on the second anniversar
y
of the Closin
g
, we are required to pa
y
an amount equal to 4.00% of the outstanding principal balance of the Senior Term Loan Facility. This fee will b
e
p
a
id i
n
ki
n
dby
cap
i
ta
li
z
i
n
g
t
h
e amount o
f
t
h
e
f
ee an
d
a
ddi
n
gi
ttot
h
e outstan
di
n
g
pr
i
nc
i
pa
l
amount o
f
t
h
e Sen
i
or
Term Loan Fac
ili
t
y
.T
h
e current we
igh
te
d
avera
g
e
i
nterest rate on our Sen
i
or Term Loan Fac
ili
t
y
was 8.8% a
t
D
ecember 31
,
2008
.
As of December 31, 2008, $1.41 billion in a
gg
re
g
ate principal amount was outstandin
g
under the Senior Ter
m
Loan Facility, with a carrying value and an approximate fair market value of
$
1.36 billion.
T
he Senior Term Loan Facilit
y
contains financial, affirmative and ne
g
ative covenants that we believe are usua
l
an
d
customary
f
or a sen
i
or secure
d
cre
di
t agreement. T
h
e negat
i
ve covenants
i
nt
h
e Sen
i
or Term Loan Fac
ili
ty
i
nclude, amon
g
other thin
g
s, limitations on our abilit
y
to: declare dividends and make other distributions, redeem or
r
epurchase our capital stock, prepa
y
, redeem or repurchase indebtedness, make loans or investments (includin
g
acqu
i
s
i
t
i
ons),
i
ncur a
ddi
t
i
ona
li
n
d
e
b
te
d
ness, enter
i
nto new
li
nes o
fb
us
i
ness, an
d
se
ll
our assets. T
h
e Sen
i
or Ter
m
Loan Fac
ili
t
yi
s secure
dby
a
bl
an
k
et
li
en on su
b
stant
i
a
lly
a
ll
o
f
our
d
omest
i
c assets,
i
nc
l
u
di
n
g
ap
l
e
dg
eo
f
a
ll
o
f
our
d
omest
i
can
di
nternat
i
ona
l
owners
hi
p
i
nterests. For purposes o
f
repa
y
ment an
di
nt
h
e event o
fli
qu
id
at
i
on,
dissolution or bankruptcy, the Sprint Tranche shall be subordinated to the Senior Term Loan Facility and obligation
s
un
d
er t
h
e Amen
d
e
d
Cre
di
tA
g
reement
.
Future payments o
fi
nterest an
d
pr
i
nc
i
pa
l
,
i
nc
l
u
di
ng payment
i
n
ki
n
di
nterest an
df
ees on our Sen
i
or Term Loa
n
Fac
ili
t
yf
or t
h
e rema
i
n
i
n
gy
ears are as
f
o
ll
ows (
i
nt
h
ousan
d
s):
Principal Interes
t
Y
ears End
i
n
g
December 31
,
2009
.
.
..................................................
$
14
,
292
$
125
,
00
7
2010
.
.
..................................................
14
,
292 153
,
66
2
2
0
11 .
.
.................................................
.
1
,
462
,
254 122
,
996
$1
,
490
,
838 $401
,
66
5
I
nterest Ex
p
ense, Net — Interest expense, net,
i
nc
l
u
d
e
di
n our conso
lid
ate
d
statements o
f
operat
i
ons
f
or t
he
y
ears en
d
e
d
Decem
b
er 31, 2008 an
d
2007, cons
i
ste
d
o
f
t
h
e
f
o
ll
ow
i
n
g
(
i
nt
h
ousan
d
s)
:
2008
2
00
7
Y
ear
E
n
d
e
d
D
ecember 31
,
I
nterest expens
e
...............................................
$
19
,
347
$
—
Accret
i
on o
fd
e
b
t
di
scoun
t
.
...................................... 1
,
667 —
C
a
p
italized interest
.
............................................
(
4,469
)
—
$16,545 $ —
11. D
e
r
iva
t
ive
In
s
tr
u
m
e
nt
s
As a resu
l
to
f
t
h
ec
l
os
i
n
g
o
f
t
h
e Transact
i
ons, we assume
d
two
i
nterest rate swap contracts w
i
t
h
two
y
ear an
d
t
hree
y
ear terms, which are based on 3-month LIBOR with a combined notional value of $600 million. These wer
e
e
conomic hedges for Old Clearwire LIBOR based debt. However, in accordance with SFAS No. 133, we did no
t
101
CLEARWIRE CORPORATION AND
S
UB
S
IDIARIE
S
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —
(
Continued
)