Metro PCS 2007 Annual Report Download - page 121

MetroPCS Communications, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2007, 2006 and 2005
F-22
$1.4 Billion 9¼% Senior Notes
On November 3, 2006, Wireless completed the sale of $1.0 billion of principal amount of 9¼% Senior Notes due
2014, (the “Initial Notes”). The net proceeds of the sale of the Initial Notes were approximately $978.0 million after
underwriter fees and other debt issuance costs of $22.0 million. The net proceeds from the sale of the 9¼% Senior
Notes, together with the borrowings under the Senior Secured Credit Facility, were used to repay amounts owed
under the credit agreements, secured bridge credit facility and unsecured bridge credit facility, and to pay related
premiums, fees and expenses, as well as for general corporate purposes. On November 3, 2006, Wireless also
entered into a registration rights agreement. Under the registration rights agreement, Wireless agreed to file a
registration statement with the United States Securities and Exchange Commission (“SEC”) relating to an offer to
exchange and issue notes equal to the outstanding principal amount of the Initial Notes. On May 15, 2007, Wireless
filed such required initial registration statement on Form S-4 (the “Existing Exchange Offer Registration
Statement”).
On June 6, 2007, Wireless completed the sale of an additional $400.0 million of 91/4% Senior Notes (the
“Additional Notes” and together with the Initial Notes, the “9¼% Senior Notes) under the existing indenture at a
price equal to 105.875% of the principal amount of such Additional Notes. On June 6, 2007, Wireless entered into a
registration rights agreement in connection with the consummation of the sale of the Additional Notes. Under the
terms of this registration rights agreement, Wireless agreed to amend the Existing Exchange Offer Registration
Statement within 120 days of the date of the registration rights agreement to include the Additional Notes. On
October 10, 2007, Wireless filed an amendment to the Existing Exchange Offer Registration Statement (“Amended
Exchange Offer Registration Statement”). On October 11, 2007, the SEC declared the Amended Exchange Offer
Registration Statement effective. The exchange offer expired on November 7, 2007, with all the Initial and
Additional Notes being tendered for exchange and the exchange offer was consummated on November 13, 2007.
The 9¼% Senior Notes are unsecured obligations and are guaranteed by MetroPCS, MetroPCS, Inc., and all of
Wireless’ direct and indirect wholly-owned subsidiaries, but are not guaranteed by Royal Street. Interest is payable
on the 9¼% Senior Notes on May 1 and November 1 of each year, beginning on May 1, 2007 for the Initial Notes
and November 1, 2007 for the Additional Notes. Wireless may, at its option, redeem some or all of the 9¼% Senior
Notes at any time on or after November 1, 2010 for the redemption prices set forth in the indenture governing the
9¼% Senior Notes. In addition, Wireless may also redeem up to 35% of the aggregate principal amount of the
9¼% Senior Notes with the net cash proceeds of certain sales of equity securities.
Senior Secured Credit Facility
On November 3, 2006, Wireless entered into the Senior Secured Credit Facility, pursuant to which Wireless may
borrow up to $1.7 billion. The Senior Secured Credit Facility consists of a $1.6 billion term loan facility and a
$100.0 million revolving credit facility. On November 3, 2006, Wireless borrowed $1.6 billion under the Senior
Secured Credit Facility. The term loan facility will be repayable in quarterly installments in annual aggregate
amounts equal to 1% of the initial aggregate principal amount of $1.6 billion. The term loan facility will mature in
seven years and the revolving credit facility will mature in five years. The net proceeds from the borrowings under
the Senior Secured Credit Facility, together with the sale of the Initial Notes, were used to repay amounts owed
under the credit agreements, secured bridge credit facility and unsecured bridge credit facility, and to pay related
premiums, fees and expenses, as well as for general corporate purposes.
The facilities under the Senior Secured Credit Facility are guaranteed by MetroPCS, MetroPCS, Inc. and each of
Wireless’ direct and indirect present and future wholly-owned domestic subsidiaries. The facilities are not
guaranteed by Royal Street, but Wireless pledged the promissory note that Royal Street has given it in connection
with amounts borrowed by Royal Street from Wireless and the limited liability company member interest held in
Royal Street Communications. The Senior Secured Credit Facility contains customary events of default, including
cross defaults. The obligations are also secured by the capital stock of Wireless as well as substantially all of
Wireless’ present and future assets and the capital stock and substantially all of the assets of each of its direct and
indirect present and future wholly-owned subsidiaries (except as prohibited by law and certain permitted
exceptions), but excludes Royal Street.