Sprint Nextel offers to guarantee IWO notes in return for indenture changes

New York, Feb. 14 - Sprint Nextel Corp. announced a consent solicitation under which it is offering to guarantee IWO Holdings, Inc.'s $150 million of senior secured floating-rate notes due 2012 and $140 million of 10¾% senior discount notes due 2015 in return for amendments to the indentures.

The proposed changes to the notes would adjust covenants to give Sprint Nextel more flexibility to integrate the IWO businesses and would allow the parent to substitute its own financial reports for those that IWO is currently required to file with the Securities and Exchange Commission.

No timing has so far been set for the solicitation, according to an S-3 filing with the SEC.

Sprint Nextel said it will guarantee the IWO notes if holders of a majority of each series of notes give their consents.

The specific changes proposed are: to modify the definition of asset sale to exclude any transfer or sale of assets from IWO Holdings to Sprint Nextel or any of its other subsidiaries; to modify the affiliate transactions covenant to allow IWO Holdings and its restricted subsidiaries to engage in transactions with Sprint Nextel and its subsidiaries, so long as the transactions are on terms that are no less favorable to IWO than would have been obtained in comparable transactions with an unrelated person, without having to obtain an independent fairness opinion or, except above a specified dollar threshold, the approval of IWO Holdings' board of directors; and permit IWO Holdings to provide Sprint Nextel's reports and other information filed with the SEC to the holders of the notes in lieu of separate reports and information relating only to IWO Holdings.

The solicitation agent is Bear, Stearns & Co. Inc. (877 696-2327), the consent agent is U.S. Bank NA (800 934-6802) and the information agent is Georgeson Shareholder Communications, Inc. (877 507-1756, banks and brokers call 212 440-9800).

Sprint Nextel is a Reston, Va., telecommunications company. It acquired IWO in October 2005.

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