Cricket Wireless 2011 Annual Report Download - page 127

LEAP WIRELESS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 9. Long-Term Debt
Long-term debt as of December 31, 2011 and 2010 was comprised of the following (in thousands):
December 31,
2011
December 31,
2010
Convertible senior notes due 2014 ............................... $ 250,000 $ 250,000
Unsecured senior notes due 2015 ............................... 300,000 300,000
Non-negotiable promissory note due 2015 ........................ 21,911 45,500
Senior secured notes due 2016 .................................. 1,100,000 1,100,000
Unamortized discount on $1,100 million senior secured notes due
2016 .................................................... (29,601) (34,962)
Unsecured senior notes due 2020 ............................... 1,600,000 1,200,000
Unamortized discount on $1,600 million unsecured senior notes due
2020 .................................................... (21,650) (19,968)
3,220,660 2,840,570
Current maturities of long-term debt ............................. (21,911) (8,500)
$3,198,749 $2,832,070
Senior Notes
Convertible Senior Notes Due 2014
In June 2008, Leap issued $250 million of unsecured convertible senior notes due 2014 in a private
placement to institutional buyers. The notes bear interest at the rate of 4.50% per year, payable semi-annually in
cash in arrears, which interest payments commenced in January 2009. The notes are Leap’s general unsecured
obligations and rank equally in right of payment with all of Leap’s existing and future senior unsecured
indebtedness and senior in right of payment to all indebtedness that is contractually subordinated to the notes.
The notes are structurally subordinated to the existing and future claims of Leap’s subsidiaries’ creditors,
including under the secured and unsecured senior notes described below. The notes are effectively junior to all of
Leap’s existing and future secured obligations, including those under the senior secured notes described below, to
the extent of the value of the assets securing such obligations.
Holders may convert their notes into shares of Leap common stock at any time on or prior to the third
scheduled trading day prior to the maturity date of the notes, July 15, 2014. If, at the time of conversion, the
applicable stock price of Leap common stock is less than or equal to approximately $93.21 per share, the notes
will be convertible into 10.7290 shares of Leap common stock per $1,000 principal amount of the notes (referred
to as the “base conversion rate”), subject to adjustment upon the occurrence of certain events. If, at the time of
conversion, the applicable stock price of Leap common stock exceeds approximately $93.21 per share, the
conversion rate will be determined pursuant to a formula based on the base conversion rate and an incremental
share factor of 8.3150 shares per $1,000 principal amount of the notes, subject to adjustment.
Leap may be required to repurchase all outstanding notes in cash at a repurchase price of 100% of the
principal amount of the notes, plus accrued and unpaid interest thereon to the repurchase date if (1) any person
acquires beneficial ownership, directly or indirectly, of shares of Leap’s capital stock that would entitle the
person to exercise 50% or more of the total voting power of all of Leap’s capital stock entitled to vote in the
election of directors, (2) Leap (i) merges or consolidates with or into any other person, another person merges
with or into Leap, or Leap conveys, sells, transfers or leases all or substantially all of its assets to another person
or (ii) engages in any recapitalization, reclassification or other transaction in which all or substantially all of Leap
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