Cricket Communications $650 million credit facility to launch Nov. 18

By Sara Rosenberg

New York, Nov. 9 - Cricket Communications Inc., a wholly owned subsidiary of Leap Wireless International Inc., is scheduled to hold a bank meeting on Nov. 18 to launch its proposed $650 million credit facility, according to a market source.

Banc of America Securities LLC, Goldman Sachs Credit Partners LP and Credit Suisse First Boston LLC are the lead banks on the deal.

The facility consists of a $500 million six-year term loan and a $150 million five-year revolver. Although specific price talk is not out yet, the term loan is expected to price somewhere in the mid-200 basis points area, a market source said.

"They already got orders in on it so it should go well," the source added.

Proceeds from the term loan will be used to redeem Cricket's existing $350 million 13% senior secured notes, pay approximately $42 million of call premium and accrued interest on the notes, repay about $41 million principal amount of debt and accrued interest owed to the Federal Communications Commission, and pay associated transaction fees and expenses, according to a company news release. Furthermore, the term loan is expected to provide the company with additional proceeds of about $57 million for general corporate purposes, including working capital and potential acquisitions.

The revolver is expected to be undrawn at closing, which is targeted for December.

"Leap continues to progress on its commitment to reduce its cost of capital and strengthen its balance sheet," said Bill Freeman, Leap's chief executive officer, in the release. "The proposed refinancing of our existing 13% senior secured notes is expected to reduce total interest expense while providing the company with the additional financial flexibility appropriate for a wireless company of our size.

"The company expects that these facilities will strengthen our bottom line net income position as we continue to improve our financial performance while supporting the measured and strategic expansion of our business."

Leap is a San Diego, Calif., mobile wireless services company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.