As filed with the Securities and Exchange Commission on April 21, 2021May 19, 2022
Registration No. 333-254882333-264457
Exact name of registrant as specified in its charter(1) | | | State or other jurisdiction of incorporation or organization | | | I.R.S. Employer Identification Number |
Sprint Solutions, Inc. | | | Delaware | | | 47-0882463 |
Sprint Spectrum LLC | | | Delaware | | | 48-1165245 |
Sprint Spectrum Realty Company, LLC | | | Delaware | | | 43-1746021 |
Sprint/United Management Company | | | Kansas | | | 48-1077227 |
SprintCom | | | Kansas | | | 48-1187511 |
T-Mobile Central LLC | | | Delaware | | | 91-1973799 |
T-Mobile Financial LLC | | | Delaware | | | 47-1324347 |
T-Mobile Innovations LLC | | | Delaware | | | Not applicable |
T-Mobile Leasing LLC | | | Delaware | | | 47-5079638 |
T-Mobile License LLC | | | Delaware | | | 91-1917328 |
T-Mobile Northeast LLC | | | Delaware | | | 52-2069434 |
T-Mobile Puerto Rico Holdings LLC | | | Delaware | | | 20-2209577 |
T-Mobile Puerto Rico LLC | | | Delaware | | | 66-0649631 |
T-Mobile Resources LLC | | | Delaware | | | 91-1909782 |
T-Mobile South LLC | | | Delaware | | | 20-3945483 |
T-Mobile West LLC | | | Delaware | | | 36-4027581 |
TDI Acquisition Sub, LLC | | | Delaware | | | 26-2671363 |
TMUS International LLC | | | Delaware | | | 91-2116909 |
Transworld Telecom II, LLC | | | Delaware | | | 26-2670333 |
TVN Ventures LLC | | | Delaware | | | Not applicable |
USST of Texas, Inc. | | | Texas | | | 43-1499027 |
Utelcom LLC | | | Kansas | | | 48-0940607 |
VMU GP, LLC | | | Delaware | | | Not applicable |
WBS of America, LLC | | | Delaware | | | 26-2671254 |
WBSY Licensing, LLC | | | Delaware | | | 36-4046585 |
Wireline Leasing Co., Inc. | | | Delaware | | | 26-3945313 |
| (1) | The address of each registrant is 12920 SE 38th Street, Bellevue, Washington 98006, and the telephone number is (425) 378-4000. |
The information in this Prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any jurisdiction where the offer and sale is not permitted.
SUBJECT TO COMPLETION, DATED PRELIMINARY PROSPECTUS
T-Mobile USA, Inc.
OFFER TO EXCHANGE ITS
2.250% Senior Secured Notes due 2025, 1.500% Senior Secured Notes due 2026,
and 3.500% Senior Secured Notes due 2028,2031
that have been registered under the Securities Act of 1933, as amended (the “Securities Act”),
FOR AN EQUAL AMOUNT OF ITS OUTSTANDING
2.250% Senior Secured Notes due 2025, 1.500% Senior Secured Notes due 2026,
and 3.500% Senior Secured Notes due 2028,
as applicable, that were issued and sold in transactions exempt from registration under the Securities Act.
T-Mobile USA, Inc., a Delaware corporation (“T-Mobile USA” or the “Issuer”) and a direct wholly-owned subsidiary of T-Mobile US, Inc. (“T-Mobile US” or “Parent”), hereby offers to exchange, upon the terms and conditions set forth in this prospectus and the accompanying letter of transmittal, up to $3,000,000,000$800,000,000 in aggregate principal amount of its 2.250% Senior Notes due 2026 (the “2026 Exchange Notes”), $1,100,000,000 in aggregate principal amount of its 3.375% Senior Notes due 2029 (the “2029 Exchange Notes”), and $1,100,000,000 in aggregate principal amount of its 3.500% Senior Secured Notes due 2025 (the “2025 Exchange Notes”), $1,000,000,000 in aggregate principal amount of its 1.500% Senior Secured Notes due 2026 (the “2026 Exchange Notes”), $4,000,000,000 in aggregate principal amount of its 3.750% Senior Secured Notes due 2027 (the “2027 Exchange Notes”), $1,750,000,000 in aggregate principal amount of its 2.050% Senior Secured Notes due 2028 (the “2028 Exchange Notes”), $7,000,000,000 in aggregate principal amount of its 3.875% Senior Secured Notes due 2030 (the “2030 Exchange Notes”), $2,500,000,000 in aggregate principal amount of its 2.550% Senior Secured Notes due 2031 (the “February 2031 Exchange Notes”), $1,000,0000,000 in aggregate principal amount of its 2.250% Senior Secured Notes due 2031 (the “November 2031 Exchange Notes”), $2,000,000,000 in aggregate principal amount of its 4.375% Senior Secured Notes due 2040 (the “2040 Exchange Notes”), $2,500,000,000 in aggregate principal amount of its 3.000% Senior Secured Notes due 2041 (the “2041 Exchange Notes”), $3,000,000,000 in aggregate principal amount of its 4.500% Senior Secured Notes due 2050 (the “2050 Exchange Notes”), $3,000,000,000 in aggregate principal amount of its 3.300% Senior Secured Notes due 2051 (the “2051 Exchange Notes”), and $1,000,000,000 in aggregate principal amount of its 3.600% Senior Secured Notes due 2060 (the “2060“2031 Exchange Notes” and, together with the 2025 Exchange Notes, the 2026 Exchange Notes, the 2027 Exchange Notes, the 2028 Exchange Notes, the 2030 Exchange Notes, the February 2031 Exchange Notes, the November 2031 Exchange Notes, the 2040 Exchange Notes, the 2041 Exchange Notes, the 2050 Exchange Notes and the 20512029 Exchange Notes, the “Exchange Notes”) for an equal amount of its outstanding 3.500%2.250% Senior Secured Notes due 2025 (the “2025 Original Notes”), 1.500% Senior Secured Notes due 2026 (the “2026 Original Notes”), 3.750%3.375% Senior Secured Notes due 20272029 (the “2027“2029 Original Notes”), 2.050% and 3.500% Senior Secured Notes due 2028 (the “2028 Original Notes”), 3.875% Senior Secured Notes due 2030 (the “2030 Original Notes”), 2.550% Senior Secured Notes due 2031 (the “February 2031 Original Notes”), 2.250% Senior Secured Notes due 2031 (the “November 2031 Original Notes”), 4.375% Senior Secured Notes due 2040 (the “2040 Original Notes”), 3.000% Senior Secured Notes due 2041 (the “2041 Original Notes”), 4.500% Senior Secured Notes due 2050 (the “2050 Original Notes”), 3.300% Senior Secured Notes due 2051 (the “2051 Original Notes”) and 3.600% Senior Secured Notes due 2060 (the “2060“2031 Original Notes” and together with the 2025 Original Notes, the 2026 Original Notes, the 2027 Original Notes, the 2028 Original Notes, the 2030 Original Notes, the February 2031 Original Notes, the November 2031 Original Notes, the 2040 Original Notes, the 2041 Original Notes, the 2050 Original Notes and the 20512029 Original Notes, the “Original Notes”). We refer to the Original Notes and the Exchange Notes, collectively, as the “Notes.”
The Issuer’s obligations under the Original Notes are, and under the Exchange Notes will be, guaranteed (such guarantees, the “Guarantees”) by (x) T-Mobile US and each wholly-owned subsidiary of the Issuer that is not an Excluded Subsidiary (as defined herein) and either (i) is or becomes an obligor of the Credit Agreement (as defined herein) or (ii) issues or guarantees certain capital markets debt securities, other than certain Excluded Subsidiaries that do not guarantee the Original Notes and will not guarantee the Exchange Notes, and(y) any future direct or indirect subsidiary of T-Mobile US or any subsidiary thereof that owns capital stock of the Issuer. The Guarantees are provided (in the case of the Original Notes) and will be provided (in the case of the Exchange Notes) on a senior secured basis except for the Unsecured Guarantees of Sprint Corporation, Sprint Communications, Inc. and Sprint Capital Corporation (the “Unsecured Guarantors”), which are provided (in the case of the Original Notes) and will be provided (in the case of Exchange Notes) on a senior unsecured basis (the “Unsecured Guarantees”).
The Original Notes and the Guarantees thereof are, and the Exchange Notes and the Guarantees thereof will be,be: the Issuer’s and the guarantors’ unsubordinated obligations; secured (except for the Unsecured Guarantees) by a first priority security interest, subject to permitted liens, in substantially all of the Issuer’s and such guarantors’ present and future assets other than Excluded Assets (as defined herein) on an equal and ratable basis with the obligations under the Credit Agreement and obligations under any other existing and future permitted first priority securedunsecured obligations; senior in right of payment to any future indebtedness of the Issuer or any guarantor to the extent that such future indebtedness provides by its terms that it is subordinated in right of payment to the Notes and the Guarantees; effectively senior to all existing and future unsecured indebtedness of the Issuer or any guarantor (other than the Unsecured Guarantors) and any future indebtedness of the Issuer or any guarantor (other than the Unsecured Guarantors) secured by a junior lien on the collateral, in each case to the extent of the value of the collateral securing the obligations under the Notes; equal in right of payment with any of the Issuer’s and the guarantors’ existing and future indebtedness and other liabilities that are not by their terms subordinated in right of payment to the Notes, including, without limitation, obligations under the Credit Agreement,Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes, (as defined herein) and the Existing Sprint Unsecured Notes, (asthe Credit Agreement and the Tower Obligations (each as defined herein); effectively subordinated to all existing and future secured indebtedness of the Issuer or any guarantor, including, without limitation, obligations under the Outstanding T-Mobile Secured Notes and the Credit Agreement, in each case to the extent of the value of the assets securing such indebtedness; and structurally subordinated to all of the liabilities and other obligations of the subsidiaries of T-Mobile US that are not obligors with respect to the Notes, including the Existing Sprint Spectrum-Backed Notes (as defined herein), factoring arrangements and tower obligations. Assets excluded from the collateral securing the Notes will include, among other things, Permitted Receivables Financing Assets (as defined herein). In addition, the Sprint Spectrum Portfolio (as defined herein) securing the existing Sprint Spectrum-Backed Notes is pledged to secure such indebtedness and does not secure the Original Notes and will not secure the Exchange Notes.
The terms of the Exchange Notes are substantially identical to the terms of the Original Notes, except that the Exchange Notes will generally be freely transferable and do not contain certain terms with respect to registration rights and additional interest. The Exchange Notes will be issued under the indentures governing the Original Notes. For a description of the principal terms of the Exchange Notes, see “Description of Notes.”
The 2026 Original Notes were an additional issuance of the 2.250% Senior Notes due 2026 issued by the Issuer in an aggregate principal amount of $1,000,000,000 on January 14, 2021 in an offering registered under the Securities Act (the “Existing Registered 2026 Notes”). The 2029 Original Notes were an additional issuance of the 3.375% Senior Notes due 2029 issued by the Issuer in an aggregate principal amount of $1,250,000,000 on March 23, 2021 in an offering registered under the Securities Act (the “Existing Registered 2029 Notes”). The 2031 Original Notes were an additional issuance of the 3.500% Senior Notes due 2031 issued by the Issuer in an aggregate principal amount of $1,350,000,000 on March 23, 2021 in an offering registered under the Securities Act (the “Existing Registered 2031 Notes” and collectively with the Existing Registered 2026 Notes and the Existing Registered 2029 Notes, the “Existing Notes”). The 2026 Original Notes, the 2029 Original Notes and the 2031 Original Notes are consolidated with and form a single series with the Existing Registered 2026 Notes, the Existing Registered 2029 Notes and the Existing Registered 2031 Notes, respectively, and have the same respective terms other than the settlement date, offering price, initial interest payment date and registration rights; however, unless and until exchanged for the applicable series of Exchange Notes pursuant to this exchange offer, the Original Notes will have separate CUSIP numbers from, and will not be fungible with, the applicable series of Existing Notes.
The exchange offer will expire at 5:00 p.m., New York City time, on , 2021,2022, unless we extend the offer. At any time prior to the expiration time, you may withdraw your tender of any Original Notes; otherwise, such tender is irrevocable. We will receive no cash proceeds from the exchange offer.
Each broker-dealer that receives Exchange Notes for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act (or, to the extent permitted by law, make available a prospectus meeting the requirements of the Securities Act to purchasers) in connection with any resale of such Exchange Notes. The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of the Exchange Notes received in exchange for the Original Notes where such Original Notes were acquired by such broker-dealer as a result of market-making or other trading activities. We have agreed that, for a period of 90 days following the effective date of the registration statement of which this prospectus forms a part, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution.”
Investing in the Exchange Notes involves certain risks. Please read “Risk Factors” beginning on page 1713 of this prospectus.
This prospectus and the letter of transmittal are first being mailed to all holders of the Original Notes on or about , 2021.2022.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2021.2022.
This prospectus incorporates important business and financial information about us that is not included in or delivered with this prospectus. Documents incorporated by reference are available from us without charge upon written or oral request. Any person, including any beneficial owner, to whom this prospectus is delivered may obtain documents incorporated by reference in, but not delivered with, this prospectus by requesting them by telephone or in writing at the following address:
T-Mobile US, Inc.
12920 SE 38th Street
Bellevue, Washington 98006
(425) 378-4000
Attn.: Investor Relations
To obtain timely delivery, you must request these documents no later than five business days before the expiration time of the exchange offer, or , 2021.2022.
You should rely only on the information incorporated by reference or provided in this prospectus. We have not authorized anyone else to provide you with information different from that contained in this prospectus. We are offering to exchange Original Notes for Exchange Notes only in jurisdictions where such offer is permitted. You should not assume that the information in the incorporated documents or this prospectus is accurate as of any other date other than the date on the front of these documents.
Unless stated otherwise or the context indicates otherwise, references to “T-Mobile,” the “Company,” “our Company,” “we,” “our,” “ours” and “us” refer to T-Mobile US, Inc. together with its direct and indirect domestic subsidiaries, including T-Mobile USA and its subsidiaries and, on and after April 1, 2020, Sprint Corporation,LLC (formerly known as Sprint Corporation), a Delaware corporationlimited liability company (“Sprint”) and its subsidiaries. References to “Sprint Communications” refer to Sprint Communications LLC (formerly known as Sprint Communications, Inc.), a Kansas limited liability company. References to “T-Mobile USA” and the “Issuer” refer to T-Mobile USA, Inc. only. T-Mobile USA’s corporate parent is T-Mobile US, Inc., which we refer to in this prospectus on a stand-alone basis as “T-Mobile US” or “Parent.” T-Mobile US has no operations separate from its investment in T-Mobile USA. Accordingly, unless otherwise noted, all of the business and financial information in this prospectus, including the factors identified under “Risk Factors” beginning on page 1713, is presented for Parent on a consolidated basis.
No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained or incorporated by reference in this prospectus in connection with the exchange offer, and, if given or made, such information or representations must not be relied upon as having been authorized by T-Mobile. This prospectus does not constitute an offer of any securities other than those to which it relates or an offer or a solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation in such jurisdiction. Neither the delivery of this prospectus nor any sale made hereunder shall under any circumstance create an implication that there has been no change in the affairs of our Company since the date hereof of this prospectus.
Certain statements in this prospectus, the documents incorporated by reference orand our other public statements include forward-looking statements.“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including information concerning our future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. The following important factors, along with the risk factors identified under “Risk Factors” and the risk factors incorporated by reference herein, could affect future results and cause those results to differ materially from those expressed in the forward-looking statements:
adverse economic, political or market conditions in the U.S. and international markets, including thoseimpact caused by the COVID-19 pandemic;pandemic (the “Pandemic”), including supply chain shortages;
competition, industry consolidation and changes in the market condition for wireless services;
disruption, data loss or other security breaches;breaches, such as the criminal cyberattack we became aware of in August 2021;
our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture;
system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems;
the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use;
the impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Transactions (as defined below), including the acquisition by DISH Network Corporation (“DISH”) of the prepaid transaction,wireless business operated under the Boost Mobile and Sprint prepaid brands (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Personal Communications Company LLC and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets, and the assumption of certain related liabilities (collectively, the “Prepaid Transaction”), the complaint and proposed final judgment (the “Consent Decree”) agreed to by us, Deutsche Telekom AG (“DT”Deutsche Telekom” or “DT”), Sprint, SoftBank Group Corp. (“SoftBank”) and DISH Network Corporation (“DISH”) with the U.S. District Court for the District of Columbia, which was approved by the Court on April 1, 2020, the proposed commitments filed with the Secretary of the Federal Communications Commission (“FCC”), which we announced on May 20, 2019, certain national security commitments and undertakings, and any other commitments or undertakings entered into, including but not limited to, those we have made to certain states and nongovernmental organizations (collectively, the “Government Commitments”), and the challenges in satisfying the Government Commitments in the required time frames and the significant cumulative costcosts incurred in tracking and monitoring compliance;
adverse economic, political or market conditions in the U.S. and complying with them;international markets, including changes resulting from increases in inflation, impacts of current geopolitical instability caused by the war in Ukraine and those caused by the Pandemic;
our inability to manage the ongoing commercial and transition services arrangements that we entered into with DISH in connection with the prepaid transaction, which we completed on July 1, 2020,Prepaid Transaction, and known or unknown liabilities arising in connection therewith;
the effects of any future acquisition, investment, or merger involving us;
any disruption or failure of our third parties (including key suppliers) to provide products or services for the operation of our business;
our substantial level of indebtedness and our inability to service our debt obligations in accordance with their terms or to comply with the restrictive covenants contained therein;
restrictive covenants including the agreements governing our debt securities or adverse conditions in the credit markets;indebtedness and other financings;
the risk of future material weaknesses we may identify while we continue to work to integrate and align policies, principles and practices of the two companies following the Merger (as defined below), or any other failure by us to maintain effective internal controls, and the resulting significant costs and reputational damage;
any changes in regulations or in the regulatory framework under which we operate;
laws and regulations relating to the handling of privacy and data protection;
unfavorable outcomes of existing or future legal proceedings;proceedings, including these proceedings and inquiries relating to the criminal cyberattack we became aware of in August 2021;
the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others;
our offering of regulated financial services products and exposure to a wide variety of state and federal regulations;
new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations;
interests of our significant stockholders that may differ from the interests of other stockholders;
future sales of our common stock by DT and SoftBank and our inability to attract additional equity financing outside the United States due to foreign ownership limitations by the FCC;
failure to realize the expected benefits and synergies of the merger (the “Merger”) with Sprint, pursuant to the Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement”) and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”) in the expected timeframestime frames or in the amounts anticipated;
any delay and costs of, or difficulties in, integrating our business and Sprint'sSprint’s business and operations, and unexpected additional operating costs, customer loss and business disruption,disruptions, including challenges in maintaining relationships with employees, customers, suppliers or vendors; and
unanticipated difficulties, disruption, or significant delays in our long-term strategy to migrate Sprint'sSprint’s legacy customers onto T-Mobile'sT-Mobile’s existing billing platforms; and
Additional information concerning these and other risk factors is contained in the section titled “Risk Factors” in this prospectus and the documents incorporated herein by reference.
Forward-looking statements in this prospectus or the documents incorporated by reference speak only as of the date of this prospectus or the applicable document incorporated by reference (or such earlier date as may be specified in the applicable document), as applicable, are based on assumptions and expectations as of such dates, and involve risks, uncertainties and assumptions, many of which are beyond our ability to control or predict, including the factors above. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. For more information, see the section entitled “Where You Can Find More Information.” The results presented for any period may not be reflective of results for any subsequent period.
You should carefully read and consider the cautionary statements contained or referred to in this section in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf, and all future written and oral forward-looking statements attributable to us are expressly qualified in their entirety by the foregoing cautionary statements.
This summary contains basic information about us and this exchange offer. It does not contain all of the information that you should consider before deciding whether to participate in the exchange offer. You should carefully read this prospectus and the documents incorporated by reference herein for a more complete understanding of our business. Additionally, you should read the “Risk Factors” section of this prospectus and in documents incorporated by reference into this prospectus before making an investment decision.
Our Company
We are theAmerica’s supercharged Un-carrier. Through our Un-carrier strategy, we have disrupted the wireless communications services industry, by actively engaging with and listening to our customers and eliminating their existing pain points, including providing them with added value, an exceptional experience and implementing signature Un-carrier initiatives that have changed the wireless industry.for good. We ended annual service contracts, overages, unpredictable international roaming fees, data buckets and so much more. We are inspired by a relentless customer experience focus, consistently leading the wireless industry in customer care by delivering an excellentaward-winning customer experience with our “Team of Experts,” which drives our record-high customer satisfaction levels while enabling operational efficiencies.
We continue to expand the footprint and improve the quality of our network, providing outstanding wireless experiences for customers who will not have to compromise on quality and value. Going forward, it is this network that will allow us to deliver new, innovative products and services with the same customer experience focus and industry-disrupting mentality that has redefined the wireless communications services industry in the United States in the customers’ favor.
As of DecemberMarch 31, 2020,2022, we provide wireless services to 102.1109.5 million postpaid and prepaid customers and generate revenue by providing affordable wireless communications services to these customers, as well as a wide selection of wireless devices and accessories. Our most significant expenses relate to operating and expanding our network, providing a full range of devices, acquiring and retaining high-quality customers and compensating employees. We provide service,services, devices and accessories across our flagship brands, T-Mobile and Metro by T-Mobile, through our owned and operated retail stores, as well as through our websites (www.t-mobile.com and www.metrobyt-mobile.com), T-Mobile app, and customer care channels.channels and through national retailers. In addition, we sell devices to dealers and other third-party distributors for resale through independent third-party retail outlets and a variety of third-party websites. The information on or accessible through our websites is not incorporated into or part of this prospectus (except for our SEC reports expressly incorporated by reference herein).
Corporate Information
Our corporate headquarters and principal executive offices are located at 12920 SE 38th Street, Bellevue, Washington 98006. Our telephone number is (425) 378-4000. We maintain a website at www.T-Mobile.com where our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
all amendments to those reports are available without charge, as soon as reasonably practicable following the time they are filed with or furnished to the SEC. The information on or accessible through our website is not incorporated into or part of this prospectus (except for our SEC reports expressly incorporated by reference herein).
This prospectus may include trademarks, service marks and trade names owned by us or other companies. All trademarks, service marks and trade names included in this prospectus are the property of their respective owners.
1
Corporate Ownership and Structure
The diagram below illustrates our current ownership and corporate structure:
| (1) | See “Description of Other Indebtedness and Certain Financing Transactions.” |
| (2) |
| Certain subsidiaries of the Issuer do not provide guarantees of the Original Notes, the Outstanding T-Mobile Secured Notes and the other Existing T-Mobile Unsecured Notes (as defined under “Description of Other Indebtedness and Certain Financing Transactions—Existing T-Mobile Unsecured Notes”) and |
Recent Developments
On January 14, 2021,April 15, 2022, T-Mobile USA issued $1.00 billion in aggregate principal amount of its 2.250% Senior Notes due 2026, $1.00 billion in aggregate principal amount of its 2.625% Senior Notes due 2029 and $1.00 billion in aggregate principal amount of its 2.875% Senior Notes due 2031, and on March 23, 2021,
Summary of the Exchange Offer
On April 9, 2020,May 13, 2021, T-Mobile USA issued $3.0$800 million in aggregate principal amount of its 2.250% Senior Notes due 2026, $1.1 billion in aggregate principal amount of its 3.375% Senior Notes due 2029 and $1.1 billion in aggregate principal amount of its 3.500% Senior Secured Notes due 2025, $4.0 billion in aggregate principal amount of its 3.750% Senior Secured Notes due 2027, $7.0 billion in aggregate principal amount of its 3.875% Senior Secured Notes due 2030, $2.0 billion in aggregate principal amount of its 4.375% Senior Secured Notes due 2040 Notes and $3.0 billion in aggregate principal amount of its 4.500% Senior Secured Notes due 2050, each with related guarantees.
In connection with eachthe offering of Original Notes described above, we entered into a registration rights agreementsagreement with the initial purchasers of the Original Notes in which we agreed (i) to use commercially reasonable efforts to cause an exchange offer registration statement of(of which this prospectus is a partpart) to be filed withwithin 365 days after May 13, 2021, or, if such 365th day is not a business day, the SEC within 30 calendar days (the “target filing date”) following the due date for the Parent’s Annual Report on Form 10-K for the year in which Sprint and its subsidiaries have been included in the consolidated results of Parent for at least nine months, which was the year ended December 31, 2020next succeeding business day, and to have such registration statement declared effective promptly thereafter, and (ii) to use commercially reasonable efforts to complete the exchange offer not later than 60 days after such effective date.
The Exchange Notes will be accepted for clearance through The Depository Trust Company (“DTC”) with a new CUSIP and ISIN number and common code for each series of the Exchange Notes. You should read the discussions under the headings “The Exchange Offer” and “Description of Notes,” respectively, for more information about the exchange offer and Exchange Notes. After the exchange offer is completed, you will no longer be entitled to any exchange or, with limited exceptions, registration rights for your Original Notes.
The Exchange Offer
T-Mobile USA is offering to exchange any and all of its 3.500%2.250% Senior Secured Notes due 2025, 1.500% Senior Secured Notes due 2026, 3.750%3.375% Senior Secured Notes due 2027, 2.050%2029 and 3.500% Senior Secured Notes due 2028, 3.875% Senior Secured Notes due 2030, 2.550% Senior Secured Notes due 2031, 2.250% Senior Secured Notes due 2031, 4.375% Senior Secured Notes due 2040, 3.000% Senior Secured Notes due 2041, 4.500% Senior Secured Notes due 2050, 3.300% Senior Secured Notes due 2051 and 3.600% Senior Secured Notes due 2060, all of which have been registered under the Securities Act, for an equal amount of its outstanding unregistered 2.250%
The 2026 Original Notes were an additional issuance of the 2.250% Senior SecuredNotes due 2026 issued by the Issuer in an aggregate principal amount of $1,000,000,000 on January 14, 2021. The 2029 Original Notes were an additional issuance of the 3.375% Senior Notes due 2029 issued by the Issuer in an aggregate principal amount of $1,250,000,000 on March 23, 2021. The 2031 Original Notes were an additional issuance of the 3.500% Senior Notes due 2031 4.375% Senior Securedissued by the Issuer in an aggregate principal amount of $1,350,000,000 on March 23, 2021. The 2026 Original Notes, due 2040, 3.000% Senior Securedthe 2029 Original Notes due 2041, 4.500% Senior Securedand the 2031 Original Notes due 2050, 3.300% Senior Securedare consolidated with and form a single series with the Existing Registered 2026 Notes, due 2051the Existing Registered 2029 Notes and 3.600% Senior Securedthe Existing Registered 2031 Notes, due 2060, as applicable. respectively, and have the same respective terms other than the settlement date, offering price, initial interest payment date and registration rights; however, unless and until exchanged for the applicable series of Exchange Notes pursuant to this exchange offer, the Original Notes will have separate CUSIP numbers from, and will not be fungible with, the applicable series of Existing Notes.
Original Notes may only be exchanged in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.
As of the date of this prospectus, $3,000,000,000$800,000,000 in aggregate principal amount of the unregistered 2.250% Senior Notes due 2026, $1,100,000,000 in aggregate principal amount of the unregistered 3.375% Senior Notes due 2029, and $1,100,000,000 in aggregate principal amount of the unregistered 3.500% Senior Secured Notes due 2025, $1,000,000,000 in aggregate principal amount of the unregistered 1.500% Senior Secured Notes due 2026, $4,000,000,000 in aggregate principal amount of the unregistered 3.750% Senior Secured Notes due 2027, $1,750,000,000 in aggregate principal amount of the unregistered 2.050% Senior Secured Notes due 2028, $7,000,000,000 in aggregate principal amount of the unregistered 3.875% Senior Secured Notes due 2030, $2,500,000,000 in aggregate principal amount of the unregistered 2.550% Senior Secured Notes due 2031 $1,000,000,000 in aggregate principal amount of the unregistered 2.250% Senior Secured Notes due 2031, $2,000,000,000 in aggregate principal amount of the unregistered 4.375% Senior Secured Notes due 2040, $2,500,000,000 in aggregate principal amount of the unregistered 3.000% Senior Secured Notes due 2041, $3,000,000,000 in aggregate principal amount of the unregistered 4.500% Senior Secured Notes due 2050, $3,000,000,000 in aggregate principal amount of the unregistered 3.300% Senior Secured Notes due 2051, and $1,000,000,000 in aggregate principal amount of the unregistered 3.600% Senior Secured Notes due 2060 are outstanding.
The terms of the Exchange Notes are identical in all material respects to those of the Original Notes, except the Exchange Notes will not be subject to transfer restrictions and holders of the Exchange Notes, with limited exceptions, will have no registration rights. Also, the Exchange Notes will not include provisions contained in the Original Notes that required payment of additional interest in the event we failed to satisfy our registration obligations with respect to the Original Notes.
Original Notes that are not tendered for exchange will continue to be subject to transfer restrictions and, with limited exceptions, will not have registration rights. Therefore, the market for secondary resales of Original Notes that are not tendered for exchange is likely to be
substantially limited. However, no market currently exists for the Exchange Notes and we can offer no assurance that such a market will develop.
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T-Mobile USA will issue registered Exchange Notes promptly after the expiration of the exchange offer.
The exchange offer is not subject to any federal or state regulatory requirements or approvals other than securities laws and blue sky laws.
Expiration Time
The exchange offer will expire at 5:00 p.m., New York City time, on , 2021,2022, unless we decide to extend the expiration time. Please read “The Exchange Offer—Extensions, Delay in Acceptance, Termination or Amendment” for more information about extending the expiration time.
Withdrawal of Tenders
You may withdraw your tender of Original Notes at any time prior to the expiration time. We will return to you, without charge, promptly after the expiration or termination of the exchange offer any Original Notes that you tendered but that were not accepted for exchange.
Conditions to the Exchange Offer
The exchange offer is subject to certain customary conditions, which we may amend or waive. We have the right, in our sole discretion, to terminate or withdraw the exchange offer if any of the conditions described in this prospectus are not satisfied or waived. The exchange offer is not conditioned on any minimum aggregate principal amount of Original Notes being tendered.
Please read “The Exchange Offer—Conditions to the Exchange Offer” for more information about the conditions to the exchange offer.
Procedures for Tendering Original Notes
If your Original Notes are held through DTC and you wish to participate in the exchange offer, you may do so through DTC’s automated tender offer program. If you tender under this program, you will agree to be bound by the letter of transmittal that we are providing with this prospectus as though you had signed the letter of transmittal. By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:
• any Exchange Notes that you receive will be acquired in the ordinary course of your business; • you have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the Exchange Notes in violations of the Securities Act; • you are not an “affiliate,” as defined in Rule 405 under the Securities Act, of us or any |
guarantor, or if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;
• you are not engaged in and do not intend to engage in a distribution of the Exchange Notes; and
• if you are a broker-dealer that will receive Exchange Notes for your own account in exchange for Original
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Notes that were acquired as a result of market-making or other trading activities and that you will deliver a prospectus meeting the requirements of the Securities Act (or, to the extent permitted by law, make available a prospectus meeting the requirements of the Securities Act to purchasers) in connection with any resale of such Exchange Notes.
Special Procedures for Beneficial Owner
If you own a beneficial interest in Original Notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender the Original Notes in the exchange offer, please contact the registered holder as soon as possible and instruct the registered holder to tender on your behalf and to comply with our instructions described in this prospectus.
Resales
Except as indicated in this prospectus, we believe that the Exchange Notes will be freely transferable by holders other than our affiliates after the exchange offer without further registration under the Securities Act if:
• you are acquiring the Exchange Notes in the ordinary course of your business;
• you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate in the distribution of the Exchange Notes; and
• you are not an affiliate of the Issuer or any guarantor.
Our belief is based on existing interpretations of the Securities Act by the SEC staff set forth in several no-action letters to third parties that are not related to us. We do not intend to seek our own no-action letter, and there is no assurance that the SEC staff would make a similar determination with respect to the Exchange Notes. If this interpretation is inapplicable, and you transfer any Exchange Notes without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from such
requirements, you may incur liability under the Securities Act. We do not assume, or indemnify holders against, such liability.
Each broker-dealer that is issued Exchange Notes for its own account in exchange for Original Notes that were acquired by the broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act (or, to the extent permitted by law, make available a prospectus meeting the requirements of the Securities Act to purchasers) in connection with any resale of the Exchange Notes. See “Plan of Distribution.”
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United States Federal Income Tax
Considerations
The exchange of Original Notes for Exchange Notes will not be a taxable exchange for United States federal income tax purposes. Please see “Material U.S. Federal Income Tax Considerations.”
Use of Proceeds
We will not receive any proceeds from the issuance of the Exchange Notes pursuant to the exchange offer. We will pay certain expenses incident to the exchange offer. See “The Exchange Offer—Transfer Taxes.”
Registration Rights
If we fail to complete the exchange offer as required by the registration rights agreement, we may be obligated to pay additional interest to holders of the Original Notes. Please see “The Exchange Offer—Additional Interest” for more information regarding your rights as a holder of the Original Notes.
The Exchange Agent
We have appointed Deutsche Bank Trust Company Americas as exchange agent for the exchange offer. Please direct questions and requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal to the exchange agent. As described in more detail under the caption “The Exchange Offer—Procedures for Tendering,” if you are not tendering under DTC’s automated tender offer program, you should send the letter of transmittal and any other required documents to the exchange agent as follows:
Deutsche Bank Trust Company Americas
Please email all inquiries to
transfer.operations@db.com
For Information or to Confirm by Telephone:
(877) 735-7777, Option 2
By Mail, Overnight Mail or Courier:
Transfer Operations
DB Services Americas, Inc.
COO Corporate & Investment Banking Technology and Operations
5022 Gate Parkway, Suite 200
Jacksonville, FL 32256
The Exchange Notes
The form and terms of the Exchange Notes to be issued in the exchange offer are substantially identical to the form and terms of the Original Notes, except that the Exchange Notes will be registered under the Securities Act and, therefore, will not bear legends restricting their transfer, will not contain terms providing for additional interest if we fail to perform our registration obligations with respect to the Original Notes and, with limited exceptions, will not be entitled to registration rights. The following summarizes the material terms of the Exchange Notes, which will evidence the same debt as the Original Notes, and both the Original Notes and the Exchange Notes are governed by the same indentures.
Issuer
T-Mobile USA, Inc.
Securities
$3,000,000,000800,000,000 in aggregate principal amount of 2.250% Senior Notes due 2026.
$1,100,000,000 in aggregate principal amount of 3.375% Senior Notes due 2029.
$1,100,000,000 in aggregate principal amount of 3.500% Senior Secured Notes due 2025.
Maturity
The 2026 Exchange Notes will mature on February 15, 2026.
The 20272029 Exchange Notes will mature on April 15, 2027.2029.
The 2028 Exchange Notes will mature on February 15, 2028.
Interest Payment Dates
Each series of Exchange Notes will have the same interest payment dates as the corresponding series of Original Notes for which they are being offered in exchange. With respect to each series of Exchange Notes, interest will accrue from the date of original issuance or, if interest has already been paid on the corresponding Original Notes exchanged therefor, the date it was most recently paid on such Original Notes.
Interest on the 2025 Exchange Notes, the 2027 Exchange Notes, the 2030 Exchange Notes, the 2040 Exchange Notes and the 2050 Exchange Notes will be payable on April 15 and October 15 of each year.
Interest on the November 20312029 Exchange Notes and the 20602031 Exchange Notes will be payable on MayApril 15 and NovemberOctober 15 of each year.
Optional Redemption
The Issuer may, at its option, redeem some or all of the 2026 Exchange Notes (i) at any time prior to the applicable date indicated in the table below at a price equal to 100% of the principal amount of such Exchange Notes being redeemed and a “make whole” premium and (ii) on or after February 15, 2023 at the applicable date indicatedfixed redemption prices described in the table below at a price equal to 100%section “Description of the principal amount of such Exchange Notes being redeemed;Notes—Optional Redemption,” plus in the case of both (i) and (ii), accrued and unpaid interest, if any, to, but not including, the redemption date, asdate. Prior to February 15, 2023, the Issuer may, at its option, redeem some or all of the 2026 Exchange Notes at a make-whole price, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, prior to February 15, 2023, the Issuer may, at its option, redeem up to 40% of the aggregate principal amount of the 2026 Exchange Notes with an amount equal to the net cash proceeds of certain sales of equity securities or certain contributions to its equity at the redemption prices described in this prospectus:the section “Description
The Issuer may, at its option, redeem some or all of the 2031 Exchange Notes at any time on or after April 15, 2026 at the fixed redemption prices described in the section “Description of Notes—Optional Redemption,” plus accrued and unpaid interest, if any, to, but not including, the redemption date. Prior to April 15, 2026, the Issuer may, at its option, redeem some or all of the 2031 Exchange Notes at a make-whole price, plus accrued and unpaid interest, if any, to, but not including, the redemption date. In addition, prior to April 15, 2024, the Issuer may, at its option, redeem up to 40% of the aggregate principal amount of the 2031 Exchange Notes with an amount equal to the net cash proceeds of certain sales of equity securities or certain contributions to its equity at the redemption prices described in the section “Description of Notes—Optional Redemption,” plus accrued and unpaid interest, if any, to, but not including, the redemption date.
Ranking
The Exchange Notes:
• will be general unsecured, unsubordinated obligations of the Issuer;
• will be senior in right of payment to any future indebtedness of the Issuer to the extent that such future indebtedness provides by its terms that it is subordinated in right of payment to the Notes;
• will rank equal in right of payment with any of the Issuer’s existing and future indebtedness and other liabilities that are not by their terms subordinated in right of payment to the Notes, including, without limitation, the obligations under any Original Notes that remain outstanding after the exchange offer, the
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Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes, the Existing Sprint Spectrum LeaseUnsecured Notes (as defined under “Description of Other Indebtedness and Certain Financing Transactions—Existing Sprint Spectrum Note Facility”Unsecured Notes”), the Credit Agreement and the holder representative under the indentures governing the Original Notes,Tower Obligations;
• will be effectively subordinated to which the holder representative under the indentures governing the Exchange Notes will become a party. The Intercreditor Agreement sets forth the rights of, and relationship among, the applicable holder representatives under all existing and future parity and junior lien debt in respectsecured indebtedness of exercise of rights and remedies against the Issuer, including, without limitation, obligations under the Outstanding T-Mobile Secured Notes and the secured guarantorsCredit Agreement, in each case to the extent of the value of the Issuer’s assets securing such indebtedness;
• will be structurally subordinated to all of the liabilities and certain other matters.obligations of the Issuer’s subsidiaries that are not obligors with respect to the Notes, including the Existing Sprint Spectrum-Backed Notes, factoring arrangements and tower obligations; and
See “Risk Factors—Risks Related to the Notes—The Notes and the Guarantees will be structurally subordinated to the indebtedness and other liabilities of the Issuer’s non-guarantor subsidiaries.”
Note Guarantees
The Exchange Notes will be guaranteed by (x) Parent and any wholly-owned subsidiary of the Issuer that is not an Excluded Subsidiary and either (i) is or becomes an obligor of the Credit Agreement or (ii) issues or guarantees certain capital markets debt securities, (including, for the avoidance of doubt, Sprint and its wholly-owned domestic subsidiaries, other than certain Excluded Subsidiaries that will not guarantee the Notes, and except that the Guarantees of Sprint, Sprint Communications, Inc. and Sprint Capital Corporation will be provided on a senior unsecured basis), and(y) any future direct or indirect subsidiary of T-Mobile USParent or any subsidiary thereof that owns capital stock of T-Mobile USA.the Issuer. See “Description of Notes—Brief Description of the Notes and the Note Guarantees—The Note Guarantees.” Each Guarantee of the Exchange Notes by a guarantor:
• will be a general unsecured, unsubordinated obligation of such guarantor; |
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Outstanding T-Mobile Secured Notes, that remain outstanding after the exchange offer, the Credit Agreement, theother Existing T-Mobile Unsecured Notes, and the Existing Sprint Unsecured Notes;Notes and the Credit Agreement;
• will be effectively subordinated to any Subsidiary Guarantor’s existing and future secured indebtedness, including, without limitation, obligations under the Outstanding T-Mobile Secured Notes and the Credit Agreement, in each case to the extent of the value of the assets of such Subsidiary Guarantor securing such Indebtedness (as defined under “Description of Notes—Certain Definitions”); and
• will be structurally subordinated to all of the indebtedness and other obligations of any subsidiaries of that guarantor that are not obligors with respect to the Notes.
See “Risk Factors—Risks Related to the Notes—The UnsecuredNotes and the Guarantees will be unsecured and effectively subordinated to the Unsecured Guarantors’Issuer’s and the guarantors’ existing and future secured indebtedness”indebtedness, including the Outstanding T-Mobile Secured Notes and borrowings under the Credit Agreement” and “Risk Factors—Risks Related to the Notes—The Notes and the Guarantees will be structurally subordinated to the indebtedness and other liabilities of the Issuer’s non-guarantor subsidiaries.”
If Parent has achieved an investment grade corporate rating and the Exchange Notes would have an investment grade rating of the Exchange Notes after giving effect to the proposed release of the subsidiary guarantees of its subsidiaries and the proposed release of the security interest in the Collateral from two of the following: Standard & Poor’s Financial Services LLC (“S&P”), Moody’s Investors Service, Inc. (“Moody’s”) and Fitch Ratings, Inc. (“Fitch”) and certain other conditions are met, the Issuer may elect to have the subsidiary guarantees of its subsidiaries permanently released. There can be no assurance that Parent or the Exchange Notes will ever be ratedhave investment grade after giving effect to such releases,ratings, or that, if they are,do, Parent or the Exchange Notes will maintain these ratings. See “Description of Notes—Brief Description of the Notes and the Note Guarantees—The Note Guarantees.”
The indentures governing the Exchange Notes will contain covenants that, among other things, limit the ability of the Issuer and its restricted subsidiaries to:
• incur more debt;
• pay dividends and make distributions;
• make certain investments;
• repurchase stock;
• create liens or other encumbrances;
• enter into transactions with affiliates;
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• enter into agreements that restrict dividends or distributions from subsidiaries;
• merge, consolidate or sell, or otherwise dispose of, substantially all of their assets; and
• grant a subsidiary guarantee of debt incurred under the Credit Agreement or certain capital markets debt without also providing a guarantee of the Exchange Notes.
These covenants will be subject to a number of important limitations and exceptions that are described later in this prospectus under the caption “Description of Notes—Certain Covenants.” If the Exchange Notes are assigned an investment grade rating by at least two of S&P, Moody’s and Fitch and no default has occurred or is continuing, certain covenants will cease to apply and will not be later reinstated even if the rating of the Exchange Notes should subsequently decline, and the Issuer may elect to have other covenants permanently changed. There can be no assurance that Parent or the Exchange Notes will ever have investment grade ratings, or that, if they do, Parent or the Exchange Notes will maintain these ratings. See “Description of Notes—Certain Covenants—Changes in Covenants When Notes Rated Investment Grade.”
Asset Sale Proceeds
If the Issuer or its restricted subsidiaries engage in certain types of asset sales, the Issuer generally must use the net cash proceeds from the sale either to make investments in its business (through capital expenditures, acquisitions or otherwise) or to repay permanently debt under credit facilities, including borrowings under the Credit Agreement, or secured by assets sold within a certain period of time after such sale or, prepay other senior debt and the Exchange Notes on a pro rata basis or prepay debt of a non-guarantor restricted subsidiary (if the assets sold were the assets of a non-guarantor restricted subsidiary); otherwise the Issuer must make an offer to purchase, on a pro rata basis, a principal amount of the Exchange Notes and other pari passu indebtedness equal to the Guarantees (other than the Unsecured Guarantees) will be secured by a first priority security interest, subject to permitted liens, in substantially allexcess net cash proceeds. The purchase price of the Issuer’sExchange Notes would be 100% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the secured guarantors’ assets, other than Excluded Assetsrepurchase date. See “Description of Notes—Repurchase at the Option of Holders—Asset Sales.”
Change of Control Triggering Event
If the Issuer experiences a Change of Control Triggering Event (as defined under “Description of Notes—Collateral—Excluded Assets”Certain Definitions”) which assets also secure, the Issuer must make an offer to each holder to repurchase the Exchange Notes at a price in cash equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the purchase date. See “Description of Notes—Repurchase at the Option of Holders—Change of Control Triggering Event.”
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Listing
The Issuer does not intend to apply for the Exchange Notes to be listed on an equalany securities exchange or to arrange for the Exchange Notes to be quoted on any quotation system.
Denominations
The Exchange Notes will be issued in minimum denominations of $2,000 and ratable basisintegral multiples of $1,000 in excess thereof.
Absence of Public Market for the obligations under any OriginalNotes
A liquid market for the Exchange Notes that remain outstanding after the exchange offer, the Credit Agreement and any other existing and future permitted first priority secured obligations.may not be available if you wish to sell your Exchange Notes.
Trustee
The Trustee for the Exchange Notes will be Deutsche Bank Trust Company Americas.
Governing Law
The Exchange Notes, the indentures governing the Exchange Notes and the Guarantees will be governed by the laws of the State of New York.
Risk Factors
You should consider carefully all of the information set forth in this prospectus and the documents incorporated by reference herein and, in particular, you should carefully evaluate the specific factors under “Risk Factors” beginning on page 13 of this prospectus and those risk factors incorporated by reference herein.
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Prior to making a decision to participate in the exchange offer, you should carefully consider the risks described below, as well as the risks and other information contained or incorporated by reference in this prospectus, including the “Risk Factors” in Parent’s Annual Report on Form 10-K for the year ended December 31, 2021, filed on February 11, 2022 and Parent’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed on May 6, 2022. If any of the risks described in this prospectus, or the risks described in any documents incorporated by reference in this prospectus, actually occur, our business, prospects, financial condition or operating results could be harmed. In such case, the trading price of the Notes could decline, and you may lose all or part of your investment.
Risks Related to the Exchange Offer
Your Original Notes will not be accepted for exchange if you fail to follow the exchange offer procedures.
We will issue Exchange Notes pursuant to the exchange offer only after a timely receipt of your Original Notes, a properly completed and duly executed letter of transmittal and all other equallyrequired documents. Therefore, if you want to tender your Original Notes, please allow sufficient time to ensure timely delivery. If we do not receive your Original Notes, letter of transmittal and ratably secured indebtednessother required documents by the expiration time of the exchange offer, we will also be released. See “Descriptionnot accept your Original Notes for exchange. We are generally under no duty to give notification of Notes—Collateral.”defects or irregularities with respect to the tenders of Original Notes for exchange. If there are defects or irregularities with respect to your tender of Original Notes, we may not accept your Original Notes for exchange.
If Parent has achievedyou do not exchange your Original Notes, your Original Notes will continue to be subject to the existing transfer restrictions and you may be unable to sell your outstanding Original Notes.
We did not register the Original Notes and do not intend to do so following the exchange offer. Original Notes that are not tendered will therefore continue to be subject to the existing transfer restrictions and may be transferred only in limited circumstances under applicable securities laws. Because we anticipate that most holders of the Original Notes will elect to exchange their Original Notes for Exchange Notes due to the absence of restrictions on the resale of Exchange Notes under the Securities Act, we anticipate that the liquidity of the market for any Original Notes remaining after the completion of this exchange offer may be substantially limited. If you do not exchange your Original Notes, you will lose your right, except in limited circumstances, to have your Original Notes registered under the federal securities laws. As a result, if you hold Original Notes after the exchange offer, you may be unable to sell your Original Notes and the value of the Original Notes may decline. We have no obligation, except in limited circumstances, and do not currently intend, to file an investment grade corporate rating and an investment grade ratingadditional registration statement to cover the resale of Original Notes that did not tender in the exchange offer or to re-offer to exchange the Exchange Notes for Original Notes following the expiration of the exchange offer.
Some persons who participate in the exchange offer must deliver a prospectus in connection with resales of the Exchange Notes.
Based on interpretations of the staff of the SEC contained in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988), Morgan Stanley & Co. Inc., SEC no-action letter (June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1983), we believe that you may offer for resale, resell or otherwise transfer the Exchange Notes after giving effectwithout compliance with the registration and prospectus delivery requirements of the Securities Act. However, in some instances described in this prospectus under “Plan of Distribution,” you will remain obligated to comply with the registration and prospectus delivery requirements of the Securities Act to transfer your Exchange Notes. In these cases, if you transfer any Exchange Note without delivering a prospectus meeting the requirements of the Securities Act or without an exemption from registration of your Exchange Notes under the Securities Act, you may incur liability under the Securities Act. We do not and will not assume, or indemnify you against, this liability.
Risks Related to the proposed releaseNotes
Our substantial level of indebtedness could adversely affect our business, financial condition and operating results, and senior creditors would have a secured claim to any collateral securing the debt owed to them.
We have, and we expect that we will continue to have, a substantial amount of debt. Our ability to make payments on our debt, to repay our indebtedness when due and to fund our capital intensive business and operations and significant planned capital expenditures will depend on our ability to generate cash in the future. There can be
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no assurance that sufficient funds will be available to us under our borrowings or otherwise. Our ability to produce cash from operations is subject to a number of risks, including:
introduction of new products and services by us or our competitors or changes in service plans or pricing by us or our competitors;
customers’ acceptance of our service offerings;
our ability to control our costs and maintain our current cost structure; and
our ability to continue to grow our customer base and maintain projected levels of churn.
Our debt service obligations could have important material consequences to you, including the following:
limiting our ability to borrow money or sell stock to fund working capital, capital expenditures, debt service requirements, acquisitions, technological initiatives and other general corporate purposes;
making it more difficult for us to make payments on indebtedness and satisfy obligations under the Notes;
increasing our vulnerability to general economic downturns, including as a result of pandemics and other macroeconomic conditions, and industry conditions and limiting our ability to withstand competitive pressure;
limiting our flexibility in planning for, or reacting to, changes in our business or the communications industry or pursuing growth opportunities;
limiting our ability to increase our capital expenditures to roll out new services or to upgrade our networks to new technologies, such as LTE and 5G;
limiting our ability to purchase additional spectrum, expand existing service areas or develop new metropolitan areas in the future;
reducing the amount of cash available for working capital needs, capital expenditures for existing and new markets and other corporate purposes by requiring us to dedicate a substantial portion of cash flow from operations to the payment of principal of, and interest on, indebtedness; and
placing us at a competitive disadvantage to competitors who are less leveraged than we are.
Any of these risks could impair our ability to fund our operations or limit our ability to obtain additional spectrum, or expand our business as planned, which could have a material adverse effect on our business, financial condition and operating results. Any such risks could also have an adverse effect on the trading prices of the guarantees of its subsidiaries andNotes.
To the proposed release of the security interestextent we become party to any hedging arrangements, we may be exposed to credit-related losses in the Collateralevent of nonperformance by counterparties to such hedging agreements. The primary credit exposure that we have with respect to such hedging agreements is that a counterparty will default on payments due, which could result in us having to acquire a replacement derivative from twoa different counterparty at a higher cost or we may be unable to find a suitable replacement. Although counterparties to any hedging agreements may be major financial institutions we would still be exposed to credit risk with these institutions. In addition, any netting and/or set off rights we may have through master netting arrangements with these counterparties may not apply to affiliates of a counterparty with whom we may have various other financial arrangements. If any financial institutions that are parties to any hedging agreements with us were to default on their payment obligations to us, declare bankruptcy or become insolvent, we may be unhedged against the following: Standard & Poor’s Financial Services LLC, Moody’s Investors Service, Inc.underlying exposures. Any of these risks could have a material adverse effect on our business, financial condition and Fitch Ratings, Inc.,operating results. Additionally, if the counterparties’ and certainour obligations under any hedging agreements are required to be secured by cash or U.S. Treasury securities, any posting of collateral by us under such arrangements would negatively impact our liquidity. The modification or termination of any such hedging agreements could also negatively impact our liquidity or other conditions are met,financial metrics.
Some of our debt also has a floating rate of interest linked to various indices. If changes in the Issuerindices result in interest rate increases, debt service requirements will increase, which could adversely affect our cash flow and operating results.
In addition, any agreements we have and may electcontinue to enter into to limit our exposure to interest rate increases may not offer complete protection from this risk, and any portion of our indebtedness not subject to such agreements would have the securityfull exposure to interest securing
rate increases.14
Any of these risks could have a material adverse effect on our business, financial condition and operating results.
Even with our current levels of indebtedness, we may incur additional indebtedness. This could further exacerbate the risks associated with our leverage.
Although we have substantial indebtedness, we may still be able to incur significantly more debt, including more secured debt, as market conditions and contractual obligations permit, which could further reduce the cash available to us to invest in operations, as a result of increased debt service obligations. The terms of the agreements governing our long-term indebtedness allow for the incurrence of additional indebtedness by us and our subsidiaries, subject to specified limitations. In particular, as of March 31, 2022, we had $5.5 billion available for borrowings under the Revolving Credit Facility (as defined under “Description of Other Indebtedness and Certain Financing Transactions—Credit Agreement”). The more leveraged we become, the more we, and in turn the holders of our securities, become exposed to the risks described above in the risk factor entitled “Our substantial level of indebtedness could adversely affect our business, financial condition and operating results, and senior creditors would have a secured claim to any collateral securing the debt owed to them.”
The Notes and the Guarantees will be unsecured and effectively subordinated to the Issuer’s and the guarantors’ existing and future secured indebtedness, including the Outstanding T-Mobile Secured Notes and borrowings under the Credit Agreement.
The Notes and the Guarantees will be general unsecured, unsubordinated obligations ranking effectively junior in right of payment to all existing and future secured debt of Parent, the Issuer and of each Subsidiary Guarantor, including the Outstanding T-Mobile Secured Notes and borrowings under the Credit Agreement, to the extent of the value of the collateral securing such debt. The Notes also will permit us to incur certain additional secured debt.
If the Issuer or a guarantor is declared bankrupt, becomes insolvent or is liquidated or reorganized, any secured debt of the Issuer or that guarantor, including under the Outstanding T-Mobile Secured Notes and the Credit Agreement, will be entitled to be paid in full from the assets of the Issuer or guarantor, as applicable, securing that debt before any payment may be made with respect to Notes or the Guarantees of such guarantor.
Holders of the Notes will participate ratably in any remaining assets with all other holders of the Issuer’s and the guarantors’ unsecured obligations that are not by their terms subordinated to the Notes, based upon the respective amounts owed. In any of the foregoing events, there may not be sufficient assets to pay the indebtedness and other obligations owed to secured creditors and the amounts due on the Notes. As a result, holders of the Notes would likely receive less, ratably, than holders of secured obligations of the Issuer and the guarantors. It is possible that with respect to the Guarantees, there will be no assets from which claims of holders of the Notes can be satisfied.
The Notes and the Guarantees will be structurally subordinated to the indebtedness and other liabilities of the Issuer’s non-guarantor subsidiaries.
The Notes and the Guarantees will be structurally subordinated to any existing or future liabilities and other obligations of the Issuer’s or the guarantors’ non-guarantor subsidiaries, including the Existing Sprint Spectrum-Backed Notes, factoring arrangements and tower obligations. Accordingly, creditors of current and future subsidiaries of the Issuer or the guarantors that are not obligors with respect to the Notes would have claims with respect to the assets of those subsidiaries that would rank structurally senior to the Notes and the Guarantees. In the event of any distribution or payment of assets of such subsidiaries in any dissolution, winding up, liquidation, reorganization or other bankruptcy proceeding, the claims of those creditors would have to be satisfied prior to making any such distribution or payment to the Issuer or the applicable guarantor in respect of direct or indirect equity interests in such subsidiaries. Certain subsidiaries of the Issuer that are prohibited from providing guarantees of the Notes (such as certain designated special purpose entities and a reinsurance subsidiary), as well as non-wholly owned and immaterial subsidiaries do not provide guarantees of the Original Notes and will not provide guarantees of the Notes. See “Description of Notes—Brief Description of the Notes and the Note Guarantees—The Note Guarantees.”
In order to service our debt, we will require a significant amount of cash, which may not be available to us on attractive terms or at all.
Our ability to meet existing or future debt obligations and to reduce indebtedness will depend on future performance and the other cash requirements of our businesses. Our performance, to a certain extent, is subject to general economic conditions and financial, competitive, business, political, regulatory and other factors, including
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third party rating agency assessments, that are beyond our control. In addition, our ability to borrow funds in the future to make payments on debt will depend on the satisfaction of covenants in the indentures governing the Notes and the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes and the Existing Sprint Unsecured Notes, the Credit Agreement, other debt agreements and other agreements we may enter into in the future. Specifically, under the Revolving Credit Facility under our Credit Agreement, we will need to maintain certain financial ratios on a quarterly basis. We cannot assure you that we will continue to generate sufficient cash flow from operations or that future equity issuances or borrowings will be available to us in an amount sufficient to enable us to satisfy financial covenants under the Credit Agreement, service our debt or repay our indebtedness in a timely manner or on favorable or commercially reasonable terms, or at all. If we are unable to satisfy financial covenants or to generate sufficient cash to timely repay our debt, our lenders could accelerate the maturity of some or all of our outstanding indebtedness. As a result, we may need to refinance all or a portion of our remaining existing indebtedness prior to its maturity. We also expect to need to refinance certain indebtedness. Disruptions in the financial markets, unfavorable rating agency assessments, the general amount of debt being refinanced at the same time, and our financial position and performance could make it more difficult to obtain debt or equity financing on favorable or commercially reasonable terms or at all. In addition, instability in the global financial markets has from time to time resulted in volatility in the capital markets. This volatility could limit our access to the credit markets, leading to higher borrowing costs or, in some cases, the inability to obtain financing on terms that are acceptable to us, or at all. Any such failure to obtain additional financing could jeopardize our ability to repay, refinance or reduce debt obligations. If we were able to obtain funds, it may not be on terms and conditions acceptable to us, which could limit or preclude our ability to pursue new opportunities, expand our service, upgrade our networks, engage in acquisitions or purchase additional spectrum, thus limiting our ability to expand our business, which could have a material adverse effect on our business, financial condition and operating results.
Further, should we need to raise additional capital, the foreign ownership restrictions mandated by the FCC, and applicable to us, could limit our ability to attract additional equity financing outside the United States.
Upon certain events including a change of control triggering event, we may be required to offer to repurchase all of the Notes, all of the Outstanding T-Mobile Secured Notes, all of the other Existing T-Mobile Unsecured Notes, all of the Existing Sprint Spectrum-Backed Notes and certain of the Existing Sprint Unsecured Notes and to repay amounts owing under the Credit Agreement, and we may not be able to finance such a repurchase or repayment. Not all significant transactions would constitute a change of control triggering event.
We have in the past been the subject of inquiries or offers related to potential strategic transactions (such as an acquisition of the Company), we may be the subject of such inquires or offers in the future, and we may engage in discussions or negotiations regarding such inquiries or offers that may ultimately lead to a transaction. The indentures governing the Original Notes, the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes, the Existing Sprint Spectrum-Backed Notes and certain of the Existing Sprint Unsecured Notes provide, and the indentures governing the Exchange Notes will provide, that, upon the occurrence of certain change of control triggering events, which change of control triggering events include a change of control combined with certain ratings downgrades or withdrawals as described further below, the Issuer will be required to offer to repurchase all Outstanding T-Mobile Secured Notes, all outstanding Existing Sprint Spectrum-Backed Notes, the applicable Existing Sprint Unsecured Notes and all outstanding Notes and other Existing T-Mobile Unsecured Notes at 101% of the principal amount thereof plus accrued and unpaid interest, if any, to, but not including, the date of repurchase. See “Description of Notes—Repurchase at the Option of Holders—Change of Control Triggering Event” and “Description of Other Indebtedness and Certain Financing Transactions.” In addition, any such change of control triggering event is expected to cause an event of default under the Credit Agreement, entitling the lenders to declare all amounts outstanding thereunder to be immediately due and payable. Such a change of control would also trigger repayments with respect to our securitization transactions and capital leases. We may not have access to sufficient funds at the time of the change of control triggering event to make the required repurchases of the Notes, the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes, the Existing Sprint Spectrum-Backed Notes and the secured Guaranteesapplicable Existing Sprint Unsecured Notes and to repay outstanding amounts under the Credit Agreement, or contractual restrictions may not allow such repurchases or repayments.
Not all change of control transactions would trigger these repurchase or repayment obligations. Specifically, these repurchase or repayment obligations would not be triggered unless both (i) such a transaction constitutes a “Change of Control” under the applicable indenture or credit agreement and (ii) such “Change of Control” is accompanied or followed by certain downgrades or withdrawals of the credit rating with respect to the applicable notes (in the case of any such indenture) or T-Mobile USA (in the case of the Credit Agreement). In the event that
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we undergo a significant corporate transaction that does not constitute a change of control triggering event, the Notes and such other obligations generally would be permitted to remain outstanding in accordance with their terms.
The failure to purchase the Notes, the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes, the Existing Sprint Spectrum-Backed Notes or the applicable Existing Sprint Unsecured Notes, as required under the respective indentures, would result in defaults under such indentures in addition to any events of default under the Credit Agreement resulting from a change of control triggering event thereunder, any of which could have material adverse consequences for us and the holders of the Exchange Notes. Any such event of default would likely trigger an event of default on other outstanding or future indebtedness.
The indentures governing the Notes, the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes and the Existing Sprint Unsecured Notes, the Credit Agreement and other financing arrangements include or will include restrictive covenants that limit our operating flexibility.
The indentures governing the Notes, the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes and the Existing Sprint Unsecured Notes, the Credit Agreement and other financing arrangements, impose, and the indentures governing the Exchange Notes will impose, significant operating and financial restrictions on us. These restrictions, subject in certain cases to customary baskets, exceptions and incurrence-based ratio tests, limit our and our subsidiaries’ ability to engage in some transactions. In particular, the Credit Agreement and the indentures governing the Existing T-Mobile Unsecured Notes include, and the indentures governing the Exchange Notes will include, restrictions limiting our and our subsidiaries’ ability to:
incur additional indebtedness and issue preferred stock;
pay dividends, redeem capital stock or make other restricted payments or investments (although we are able to make significant restricted payments under the Credit Agreement and the indentures governing the Existing T-Mobile Unsecured Notes);
sell or buy assets, properties or licenses including by participating in future FCC auctions of spectrum or private sales of spectrum;
develop assets, properties or licenses that we have or in the Collateral permanently released.future may procure;
enter into transactions with affiliates; and
place restrictions on the ability of subsidiaries to pay dividends or make other payments.
In addition, the indentures governing the Original Notes, the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes and Existing Sprint Unsecured Notes and the Credit Agreement limit, and the indentures governing the Exchange Notes will limit, our and our subsidiaries’ ability to:
create liens or other encumbrances in respect of indebtedness for borrowed money; and
engage in mergers, business combinations or other transactions.
In addition, the Revolving Credit Facility contains a financial maintenance covenant, requiring us to maintain a total first lien net leverage ratio at the end of each fiscal quarter of 3.30:1.00 or less. Any future debt that we incur may contain financial maintenance covenants as well. These restrictions could limit our ability to obtain debt financing, repurchase stock, refinance or pay principal on our outstanding debt, complete acquisitions for cash or debt or react to changes in our operating environment or the economy.
Any failure to comply with the restrictions of the indentures governing the Notes, the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes or the Existing Sprint Unsecured Notes, the Credit Agreement or other financing agreements may result in an event of default under these agreements, which in turn may result in defaults or acceleration of obligations under these agreements and other agreements, giving our lenders and other debt holders the right to terminate any commitments they had made to provide us with further funds and to require us to repay all amounts then outstanding. Any of these events would have a material adverse effect on our business, financial condition and operating results.
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The Guarantees may be released upon the occurrence of certain events.
The Guarantee of a guarantor will be automatically and unconditionally released in respect of the Notes of any series:
only in the case of a Subsidiary Guarantor, at such time as such Subsidiary Guarantor (i) is not, (ii) is released or relieved as, or (iii) ceases (or substantially concurrently will cease) to be, a borrower or guarantor under the Credit Agreement and under the Existing T-Mobile Secured Notes (as defined under “Description of Notes—Certain Definitions”), except by or as a result of payment under such guarantee or direct obligation;
only in the case of a Subsidiary Guarantor, in connection with any sale or other disposition of all or substantially all of the assets of that Subsidiary Guarantor (including by way of merger or consolidation) to a person that is not (either before or after giving effect to such transaction) the Issuer or a Restricted Subsidiary of the Issuer, if the sale or other disposition is not prohibited by the “Asset Sale” provisions of the Indenture;
only in the case of a Subsidiary Guarantor, if for any reason such Subsidiary Guarantor ceases to be a wholly-owned subsidiary of the Issuer; provided, that any Subsidiary Guarantor that ceases to constitute a Subsidiary Guarantor or becomes an Excluded Subsidiary solely by virtue of no longer being a wholly-owned subsidiary (a “Partially Disposed Subsidiary”) shall only be released from its Note Guarantee (as defined under “Description of Notes—Certain Definitions”) to the extent that the other person taking an equity interest in such Partially Disposed Subsidiary is not an affiliate of the Issuer that is controlled by Parent, Deutsche Telekom or any of their respective subsidiaries or an employee of any of the foregoing;
upon the legal defeasance, covenant defeasance, or satisfaction and discharge of the indentures governing the Notes as provided under “Description of Notes—Legal Defeasance and Covenant Defeasance” and “Description of Notes—Satisfaction and Discharge”;
upon the liquidation or dissolution of any Subsidiary Guarantor, provided that no event of default under the indentures governing the Notes has occurred that is continuing;
upon the merger or consolidation of any guarantor with and into the Issuer or another guarantor that is the surviving person in such merger or consolidation;
in the case of a Subsidiary Guarantor, at the time of an Investment Grade Event Election (as defined under “Description of Notes—Certain Definitions”); or
if the Issuer designates any restricted subsidiary that is a guarantor to be an unrestricted subsidiary in accordance with the applicable provisions of the indentures governing the Notes.
If any such Guarantee is released, no holder of the Notes will have a claim as a creditor against the applicable guarantor, and the indebtedness and other liabilities of such former Subsidiary Guarantor will be structurally senior to the claim of any holder of the Notes. See “Description of Notes—Brief Description of the Notes and the Note Guarantees—The Note Guarantees.”
The Guarantees may be avoidable and therefore not be enforceable because of fraudulent conveyance or fraudulent transfer laws.
The Guarantees may be subject to review and potential avoidance under federal bankruptcy law or relevant state fraudulent conveyance laws if we or any guarantor file a petition for bankruptcy or our creditors file an involuntary petition for bankruptcy against us or any guarantor. Under these laws, if a court were to find that, at the time a guarantor incurred debt (including debt represented by the Guarantee), such guarantor:
incurred this debt with the intent of hindering, delaying or defrauding current or future creditors; or
received less than reasonably equivalent value or fair consideration for incurring this debt, and the guarantor;
was insolvent or was rendered insolvent by reason of the related financing transactions (including the issuance of the Guarantees);
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was engaged in, or about to engage in, a business or transaction for which its remaining assets constituted unreasonably small capital to carry on its business as currently engaged in or contemplated; or
intended to incur, or believed that it would incur, debts beyond its ability to pay these debts as they mature, as all of the foregoing terms are defined in or interpreted under the relevant fraudulent transfer or conveyance statutes;
then the court could avoid the Guarantee or subordinate the amounts owing under the Guarantee to the guarantor’s presently existing or future debt or take other actions detrimental to you. In the event of a finding that a fraudulent transfer or conveyance occurred, you may not receive any repayment on the relevant Guarantee (and, consequently, the Notes), or may receive only a partial repayment.
The measure of insolvency for purposes of the foregoing considerations will vary depending upon the law of the jurisdiction that is being applied in any such proceeding, such that we cannot be certain as to the standards a court would use to determine whether or not the Issuer or the guarantors were insolvent at the relevant time or, regardless of the insolvency standard applied by the court, that such court would not determine (i) that the Issuer or a guarantor were indeed insolvent on that date, (ii) that any payments to the holders of the Notes (including under the Guarantees) did not constitute preferences, fraudulent transfers or conveyances on other grounds or (iii) whether the Notes or any Guarantees would be subordinated to the Issuer’s or any of the guarantors’ other debt. Generally, however, an entity would be considered insolvent if, at the time it incurred the debt or issued the Guarantee:
it could not pay its debts or contingent liabilities as they become due;
the sum of its debts, including contingent liabilities, is greater than its assets, at a fair valuation; or
the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities, including contingent liabilities, as they become absolute and mature.
As a general matter, value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or a valid antecedent debt is secured or satisfied. A court would likely find that a guarantor did not receive “reasonably equivalent value” (or fair consideration for) its Guarantee to the extent the guarantor did not obtain a reasonably equivalent benefit directly or indirectly from the issuance of the Notes. Thus, if the Guarantees were legally challenged, any Guarantee could be subject to the claim that, since the Guarantee was incurred for the benefit of the Issuer, and only indirectly for the benefit of the guarantor, the obligations of the applicable guarantor were incurred for less than “reasonably equivalent value” (or fair consideration). Therefore, if a court were to find that the applicable guarantor was insolvent or rendered insolvent by the incurrence of the Guarantee or one of the other conditions above (relating to the guarantor’s financial condition) were satisfied, the court could avoid the obligations under the Guarantees, subordinate them to the applicable guarantor’s other debt or take other action detrimental to the holders of the Notes.
If a Guarantee is avoided as a fraudulent conveyance, fraudulent transfer, or preference, or found to be unenforceable for any other reason, you will not have a claim against that obligor and will only be our creditor or that of any guarantor whose obligation was not set aside or found to be unenforceable. In addition, the loss of a Guarantee generally will constitute an event of default under the indentures governing the Notes, the Outstanding T-Mobile Secured Notes and the other Existing T-Mobile Unsecured Notes and the Credit Agreement, which events of default would allow the relevant noteholders or lenders to accelerate the amounts due and payable thereunder, and we may not be able to pay any such amounts.
The indentures governing the Notes will contain a provision intended to limit each guarantor’s liability to the maximum amount that it could incur without causing the incurrence of obligations under its Guarantee to be a fraudulent transfer. This provision may not be effective (as a legal matter or otherwise) to protect the Guarantees from being avoided under fraudulent transfer law, or may eliminate the guarantor’s obligations or reduce the guarantor’s obligations to an amount that effectively makes the Guarantee worthless. In a Florida bankruptcy court decision (which was subsequently reversed by a district court on other grounds and then reinstated by the applicable circuit court of appeals), this kind of provision was found to be ineffective to protect the Guarantees.
In addition, any payment by us pursuant to the Notes or by a guarantor under a Guarantee made at a time we or such guarantor were found to be insolvent could be avoided as a preferential transfer under the U.S. Bankruptcy Code and required to be returned to us or such guarantor or to a fund for the benefit of our or such guarantor’s
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creditors if such payment is made to an insider within a one-year period prior to a bankruptcy filing or within 90 days for any non-insider party, and such payment would give such insider or non-insider party more than such party would have received in a distribution under the U.S. Bankruptcy Code in a hypothetical Chapter 7 case, subject to applicable defenses.
Finally, as a court of equity, the bankruptcy court may subordinate the claims in respect of the Notes or the Guarantees to other claims against us under the principle of equitable subordination if the court determines that (1) a holder of the Notes or the Guarantees engaged in some type of inequitable conduct, (2) the inequitable conduct resulted in injury to our other creditors or conferred an unfair advantage upon the holders of the Notes and (3) equitable subordination is not inconsistent with the provisions of the U.S. Bankruptcy Code.
The lenders under the Credit Agreement have the discretion to release any guarantors under the Credit Agreement in a variety of circumstances, which could cause those guarantors to be released from their guarantees of each series of the Notes.
For so long as any obligations under the Credit Agreement remain outstanding, any guarantee of the Notes may be released without action by, or consent of, any holder of the Notes, if the related guarantor is no longer a guarantor of obligations under the Credit Agreement or certain other indebtedness of the Issuer or any other guarantor (except, in each case, by or as a result of payment under such guarantee or direct obligation). See “Description of Notes—Brief Description of the Notes and the Note Guarantees—The Note Guarantees.” The lenders under the Credit Agreement will have the discretion to release the guarantees under the Credit Agreement in a variety of circumstances. You will not have a claim as a creditor against any entity that is no longer a guarantor of the Notes, and the indebtedness and other liabilities, including trade payables, whether secured or unsecured, of former guarantor subsidiaries will be structurally senior to claims of holders of the Notes.
Many of the covenants in the indentures governing the Notes will not apply if the Notes are rated investment grade.
The indentures governing the Notes provide that many of their covenants will cease to apply to us if the Notes are rated investment grade by at least two of Moody’s, S&P and Fitch, provided at such time no default or event of default has occurred and is continuing. The indentures further provide that these covenants will not be later reinstated in the event that the ratings of the Notes subsequently decline. These covenants restrict, among other things, our ability to pay dividends, to incur debt and to enter into certain other transactions. There can be no assurance that the Exchange Notes will ever be rated investment grade. However, termination of these covenants would allow us to engage in certain transactions that would not be permitted while these covenants were in force. See “Description of Notes—Certain Covenants—Changes in Covenants When Notes Rated Investment Grade.” Although the indentures will continue to restrict the Issuer’s ability to create liens or other encumbrances after the Notes are rated investment grade by at least two of Moody’s, S&P and Fitch, such covenant may be modified at the Issuer’s election, following such a rating event, to restrict only the Issuer and Material Subsidiaries (as defined under “Description of the Notes—Certain Definitions”) from incurring liens on principal properties or upon capital stock or indebtedness of any Material Subsidiary (as defined under “Description of Notes—Certain Definitions”) that directly owns any principal property, subject to certain exceptions set forth in the indentures governing the Notes. See “Description of Notes—Certain Covenants—Liens.” In addition, at the Issuer’s election, following such a rating event, the Guarantees of the Subsidiary Guarantors may be released. See “—The Guarantees may be released upon the occurrence of certain events.”
If we or existing investors sell our debt securities after this exchange offer, the market price of the Notes could decline.
The market price of the Notes could decline as a result of our, or existing investors’, sales of the Issuer’s debt securities in the market after this exchange offer, or the perception that such sales could occur. These sales, or the possibility that these sales may occur, also might make it more difficult for the Issuer to sell other debt securities in the future at a time and on terms that it deems appropriate.
After giving effect to such releases,the Q2 Repayment, as of March 31, 2022, we would have had outstanding approximately $70.0 billion in aggregate principal amount of debt securities, maturing in 2022 through 2060, $40.2 billion of which would be senior secured debt securities and $29.8 billion of which would be senior unsecured debt securities. Deutsche Telekom, which currently controls approximately 51.8% of the common stock of Parent, would have held
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$1.5 billion of these debt securities, maturing in 2028. We have on file an effective shelf registration statement with respect to these debt securities held by Deutsche Telekom and Deutsche Telekom could sell all or any portion of them at any time.
There is no guarantee that an active trading market for the Notes will exist or that you will be able to sell your Notes.
An active trading market may not exist for the Exchange Notes or any Original Notes that remain outstanding after the exchange offer. In addition, subsequent to their initial issuance, the Notes may trade at a discount from their initial offering price (or, in the case of Exchange Notes, the initial offering price of the Original Notes of the same series), depending upon prevailing interest rates, the market for similar notes, our operating performance and financial condition and other factors. The Issuer does not intend to apply for the Exchange Notes or any Original Notes that remain outstanding after the exchange offer to be listed on any securities exchange or to arrange for the Exchange Notes or any Original Notes that remain outstanding after the exchange offer to be quoted on any quotation system. An active trading market may not exist for the Existing Notes and Exchange Notes or may cease to exist. In addition, there may cease to be a market for the Original Notes. If an active public trading market for the Notes does not exist or ceases to exist, the market price and liquidity of the Notes may be adversely affected.
The trading prices for the Notes will be directly affected by many factors, including our credit rating.
Credit rating agencies continually revise their ratings for companies they follow, including us. Changes in our performance, leverage or industry, or changes in the credit ratings agencies’ ratings methodologies, could lead to ratings downgrades. Any ratings downgrade could adversely affect the trading price of the Notes, or the trading market for the Notes, to the extent a trading market for the Notes exists or develops. The condition of the financial and credit markets and prevailing interest rates have fluctuated in the past and are likely to fluctuate in the future, and any fluctuation may impact the trading price of the Notes.
T-Mobile US’ Fifth Amended and Restated Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain actions and proceedings, which could limit the ability of our investors to obtain a judicial forum of their choice for disputes with T-Mobile US or its directors, officers or employees.
T-Mobile US’ Certificate of Incorporation provides that, unless T-Mobile US consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of T-Mobile US, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or employee of T-Mobile US to T-Mobile US or its stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or T-Mobile US’ bylaws or (iv) any other action asserting a claim arising under, in connection with, and governed by the internal affairs doctrine. This choice of forum provision does not waive our compliance with our obligations under the federal securities laws and the rules and regulations thereunder. Moreover, the provision does not apply to suits brought to enforce a duty or liability created by the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or by the Securities Act.
This choice of forum provision may increase costs to bring a claim, discourage claims or limit an investor’s ability to bring a claim in a judicial forum that the investor finds favorable for disputes with T-Mobile US or its directors, officers or employees, which may discourage such lawsuits against T-Mobile US and its directors, officers and employees, even though an action, if theysuccessful, might benefit our investors. Alternatively, if a court were to find the choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such matters in other jurisdictions, which could increase our costs of litigation and adversely affect our business and financial condition.
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We will not receive any cash proceeds from the issuance of the Exchange Notes. We are making this exchange offer solely to satisfy our obligations under the registration rights agreement entered into in connection with the offering of the Original Notes. In consideration for issuing the Exchange Notes as contemplated in this prospectus, we will receive in exchange Original Notes in like principal amount, which will be cancelled, and, as such, issuing the Exchange Notes will maintain these ratings. See “Descriptionnot result in any increase in our indebtedness or be financed with new borrowings.
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Purpose of Notes—Collateral—Release.”the Exchange Offer
use our commercially reasonable efforts to file a registration statement (which we refer to as an exchange offer registration statement) with the SEC with respect to a registered exchange offer (which we refer to as a registered exchange offer) to exchange the Original Notes for new notes of the company, guaranteed by the guarantors and having terms identical in all material respects to the Original Notes (except that the new notes will not contain terms with respect to transfer restrictions from granting liens on eachor additional interest (as defined below)); and
use our commercially reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act and to consummate the exchange offer not later than 60 days after such effective date.
In addition, we agreed to provide that upon the effectiveness of their respective assets, pursuant to covenants provided under their various existing debt agreements. Consequently, the obligations underexchange offer registration statement, we would promptly commence the exchange offer, whereby the Exchange Notes will be offered in exchange for surrender of the Original Notes, and that we will keep the registered exchange offer open for not less than 20 business days (or longer if required by applicable law including in accordance with the requirements of Regulation 14E under the Exchange Act) after the date notice of the registered exchange offer is first mailed, sent or given to the noteholders. For each note surrendered to the Issuer for exchange pursuant to the registered exchange offer, the holder of such note will receive an Exchange Note having a principal amount equal to that of the surrendered note.
We are offering the Exchange Notes under this prospectus in an exchange offer for the Original Notes to satisfy our obligations under the registration rights agreement. We refer to our offer to exchange the Exchange Notes for the Original Notes as the “exchange offer.”
Resale of Exchange Notes
Based on interpretations by the staff of the SEC, as described in no-action letters issued to third parties that are not related to us, including Morgan Stanley & Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling LLP (dated July 2, 1993), we believe the Exchange Notes will be freely transferable by holders other than our affiliates after the exchange offer without further registration under the Securities Act if the holder of the Exchange Notes represents to us in the exchange offer that it is acquiring the Exchange Notes in the ordinary course of its business, that it has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes and that it is not our affiliate, as such terms are interpreted by the SEC; provided, however, that broker-dealers (“Participating Broker-Dealers”) receiving Exchange Notes in the exchange offer will have a prospectus delivery requirement with respect to resales of such Exchange Notes. We also believe that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to Exchange Notes (other than a resale of an unsold allotment from the sale of the Original Notes) with this prospectus.
We have not entered into any arrangement or understanding with any person who will receive Exchange Notes in the exchange offer to distribute those securities following completion of the exchange offer. We are not aware of any person that will participate in the exchange offer with a view to distribute the Exchange Notes. If you tender your Original Notes in the exchange offer with the intention of participating in any manner in a distribution of the Exchange Notes, you:
cannot rely on such interpretations of the SEC staff set forth in the no-action letters described above; and
must comply with the registration and prospectus delivery requirements of the Securities Act in order to resell Exchange Notes, and be identified as an underwriter in the prospectus.
Unless an exemption from registration is otherwise available, the resale by any security holder intending to distribute Exchange Notes should be covered by an effective registration statement under the Securities Act containing the selling security holder’s information required under the Securities Act. This prospectus may be used for an offer to resell, a resale or other retransfer of Exchange Notes only as specifically described in this prospectus. Each broker-dealer that receives Exchange Notes for its own account in exchange for Original Notes,
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where such Original Notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act (or, to the extent permitted by law, make available a prospectus meeting the requirements of the Securities Act to purchasers) in connection with any resale of such Exchange Notes. See “Plan of Distribution.”
Shelf Registration
In the registration rights agreement, we agreed that in the event that:
any changes in applicable law or interpretations of the staff of the SEC do not permit us and the guarantors to effect such a registered exchange offer; or
after the filing of the exchange offer registration statement with the SEC, we receive a written request within 20 business days after the consummation of the exchange offer from any noteholder that is prohibited by law or SEC policy from participating in the registered exchange offer, any noteholder who participates in the registered exchange offer but does not receive Exchange Notes that may be sold without Securities Act restrictions on transfer (other than restrictions resulting solely by reason of the status of such noteholder as our affiliate or an affiliate of any guarantor) (subject, in each case, to certain exceptions), or any initial purchasers with respect to the Original Notes that have, or that are reasonably likely to be determined to have, the status of unsold allotments in the original distribution of the Original Notes,
then in all such cases, we and the guarantors will, as soon as practicable but in any event within 60 days of the date of the written request, use our commercially reasonable efforts to (a) file a registration statement (which we refer to as a shelf registration statement) covering resales of the Original Notes or the Exchange Notes, as the case may be, from time to time, (b) cause the shelf registration statement to be declared effective by the SEC under the Securities Act promptly and (c) keep the shelf registration statement effective until the earlier of (X) the date when the Original Notes cease to be registrable securities as defined in the registration rights agreement or (Y) the date that is 210 calendar days following the date that is the earlier of (i) 365 days after May 13, 2021 (or, if such 365th day is not a business day, the next succeeding business day) (such 365th day or, if applicable, next succeeding business day, a “Target Filing Date”) or (ii) the date on which all Original Notes and/or Exchange Notes covered by the shelf registration statement have been sold in the manner set forth and as contemplated in the shelf registration statement. In addition, we agreed to, in the event a shelf registration statement is filed, use our commercially reasonable efforts to provide to each noteholder for which such shelf registration statement was filed, copies of the prospectus which is a part of the shelf registration statement, notify each such noteholder when the shelf registration statement has been declared effective by the SEC and take certain other actions as are required to permit unrestricted resales of the Original Notes or the Exchange Notes, as the case may be. A noteholder selling Original Notes or Exchange Notes pursuant to the shelf registration statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the registration rights agreement applicable to such noteholder (including certain indemnification obligations). In addition, each holder of the Original Notes or Exchange Notes to be registered under the shelf registration statement will be required to deliver information to be used in connection with the shelf registration statement within the time period set forth in the registration rights agreement in order to have such holder’s Original Notes or Exchange Notes included in the shelf registration statement and to benefit from the provisions regarding additional interest set forth in the following paragraph.
Additional Interest
If the exchange offer registration statement is not on file with the SEC on or prior to the Target Filing Date, or, if applicable, the shelf registration statement is required to be filed but is not on file with the SEC on or prior to the Target Filing Date, or if applicable, the shelf registration statement is declared effective but thereafter ceases to be effective or usable and such failure to remain effective or usable exists for more than 120 days (whether or not consecutive) in any 12-month period (in each case subject to certain exceptions), then, upon the occurrence of any such events, additional interest shall accrue on the principal amount of the Original Notes at a rate of 0.25% per annum for the first 90-day period beginning on and including such date, increasing by an additional 0.25% per annum with respect to any subsequent 90-day period up to a maximum amount of additional interest of 0.50% in the
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aggregate per annum thereafter, until the Original Notes cease to be registrable securities or, if earlier, when the exchange offer is completed, the shelf registration statement becomes effective or, if such shelf registration statement ceased to be effective, when such shelf registration statement again becomes effective. Such interest will be computed ratably on the basis of twelve 30-day months.
Under certain circumstances, we and the guarantors may delay the filing or the effectiveness of the exchange offer registration statement or the shelf registration statement and will not be required to maintain the effectiveness thereof or amend or supplement the exchange offer registration statement or the shelf registration statement for one or more periods not to exceed an aggregate of 120 days during any 12-month period. Any delay period will not defer our obligation to pay additional interest.
This summary of certain provisions of the registration rights agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the registration rights agreement. A copy of each registration rights agreement is an exhibit to the registration statement that includes this prospectus.
Terms of the Exchange Offer
Upon the terms and subject to the conditions described in this prospectus and in the letter of transmittal, we will accept for exchange any Original Notes properly tendered and not withdrawn prior to the expiration time of the exchange offer. We will issue $1,000 principal amount of Exchange Notes in exchange for each $1,000 principal amount of Original Notes surrendered under the exchange offer and accepted by us. Original Notes may be tendered only in integral multiples of $1,000, subject to a $2,000 minimum, and untendered Original Notes may only be in a minimum denomination of $2,000 and integral multiples of $1,000 in excess thereof.
The terms of the Exchange Notes are identical in all material respects to those of the Original Notes, except the Exchange Notes will not be subject to transfer restrictions and holders of the Exchange Notes, with limited exceptions, will have no registration rights. Also, the Exchange Notes will not include provisions contained in the Original Notes that required payment of additional interest in the event we failed to satisfy our registration obligations with respect to the Original Notes. Each series of Exchange Notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the related Original Notes.
The exchange offer is not conditioned on any minimum aggregate principal amount of Original Notes being tendered for exchange.
As of the date of this prospectus, $800,000,000 in aggregate principal amount of the unregistered 2.250% Senior Notes due 2026, $1,100,000,000 in aggregate principal amount of the unregistered 3.375% Senior Notes due 2029, and $1,100,000,000 in aggregate principal amount of the unregistered 3.500% Senior Notes due 2031 are outstanding. This prospectus and the letter of transmittal are being sent to all registered holders of the Original Notes. There will be no fixed record date for determining registered holders of the Original Notes entitled to participate in the exchange offer.
We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the applicable requirements of the Securities Act and the Exchange Act, and the SEC rules and regulations. Original Notes that are not tendered for exchange in the exchange offer:
will remain outstanding;
will continue to accrue interest; and
will be entitled to the rights and benefits that holders have under the indenture relating to such notes and, under limited circumstances, the registration rights agreement.
We will be deemed to have accepted for exchange properly tendered Original Notes when we have given written notice of the acceptance to the exchange agent and complied with the applicable provisions of the registration rights agreement. The exchange agent will act as agent for the tendering holders for the purposes of receiving the Exchange Notes from us. We will issue the Exchange Notes promptly after the expiration of the exchange offer.
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If you tender Original Notes in the exchange offer, you will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of Original Notes. We will pay all charges and expenses, other than certain applicable taxes described below, in connection with the exchange offer. It is important that you read “—Fees and Expenses” below for more details about fees and expenses incurred in the exchange offer.
We will return any Original Notes that we do not accept for exchange for any reason without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer.
The exchange offer is not subject to any federal or state regulatory requirements or approvals other than securities laws and blue sky laws.
Expiration Time
The exchange offer will expire at 5:00 p.m., New York City time, on , 2022, unless at our sole discretion we extend the exchange offer.
Extensions, Delay in Acceptance, Termination or Amendment
We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. We may delay acceptance for exchange of any Original Notes by giving oral or written notice of the extension to their holders. During any such extensions, all Original Notes you have previously tendered will remain subject to the exchange offer for that series, and we may accept them for exchange.
To extend the exchange offer, we will notify the exchange agent orally or in writing (if oral to be promptly confirmed in writing) of any extension. We also will make a public announcement of the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration time.
If any of the conditions described below under “—Conditions to the Exchange Offer” have not been satisfied with respect to the exchange offer, we reserve the right, at our sole discretion:
to extend the exchange offer;
to delay accepting for exchange any Original Notes; or
to terminate the exchange offer.
We will give oral or written notice (if oral to be promptly confirmed in writing) of such extension, delay or termination to the exchange agent. Subject to the terms of the registration rights agreement, we also reserve the right to amend the terms of the exchange offer in any manner.
Any such extension, delay in acceptance, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders of the Original Notes. If we amend the exchange offer in a manner that we determine to constitute a material change, we will promptly disclose that amendment by means of a prospectus supplement and we will extend the offer period if necessary so that at least five business days remain in the offer period following notice of the material change. We will distribute the supplement to the registered holders of the Original Notes. Depending on the significance of the amendment and the manner of disclosure to the registered holders, we may extend, pursuant to the terms of the registration rights agreement and the requirements of federal securities law, the exchange offer if the exchange offer would otherwise expire during such period.
Without limiting the manner in which we may choose to make public announcements of any extension, delay in acceptance, termination or amendment of the exchange offer, we have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a timely release to an appropriate news agency.
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Conditions to the Exchange Offer
Notwithstanding any other provision of the exchange offer and subject to the terms of the registration rights agreement, we will not be required to accept for exchange, or to issue Exchange Notes in exchange for, any Original Notes and may terminate or amend the exchange offer, if at any time before the expiration time of the exchange offer any of the following events occur:
any injunction, order or decree has been issued by any court or any governmental agency that would prohibit, prevent or otherwise materially impair our ability to proceed with the exchange offer; or
the exchange offer violates any applicable law or any applicable interpretation of the staff of the SEC.
In addition, we will not be obligated to accept for exchange the Original Notes of any holder that has not made to us:
the representations described under “—Procedures for Tendering” and “Plan of Distribution;” and
such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available to us an appropriate form for registering the Exchange Notes under the Securities Act.
We expressly reserve the right to amend or terminate the exchange offer notwithstanding the satisfaction of the foregoing, and to reject for exchange any Original Notes upon the occurrence of any of the conditions to the exchange offer specified above. We will give oral or written notice of any extension, non-acceptance, termination or amendment to the holders of the Original Notes as promptly as practicable.
These conditions are for our sole benefit, and we may assert them or waive them in whole or in part at any time or at various times at our sole discretion. Our failure at any time to exercise any of these rights will not mean that we have waived our rights. Each right will be deemed an ongoing right that we may assert at any time or at various times. If we waive a condition, we may be required in order to comply with applicable securities laws, to extend the expiration time of the exchange offer.
In addition, we will not accept for exchange any Original Notes tendered, and will not issue Exchange Notes in exchange for any such Original Notes, if at such time any stop order has been threatened or is in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indentures relating to the Exchange Notes under the Trust Indenture Act of 1939.
Procedures for Tendering
How to Tender Generally
Only a holder of the Original Notes as determined by our records or those of Deutsche Bank Trust Company Americas, as trustee or DTC may tender Original Notes in the exchange offer. To tender in the exchange offer, a holder must either (1) comply with the procedures for physical tender or (2) comply with the automated tender offer program procedures of DTC, described below.
To complete a physical tender, a holder must:
complete, sign and date the letter of transmittal or a facsimile of the letter of transmittal;
have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires;
mail or deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration time; and
deliver the Original Notes to the exchange agent prior to the expiration time.
To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at its address provided above under “Prospectus Summary—The Exchange Agent” prior to the expiration time.
To complete a tender through DTC’s automated tender offer program, the exchange agent must receive, prior to the expiration time, a timely confirmation of book-entry transfer of such Original Notes into the exchange agent’s account at DTC according to the procedure for book-entry transfer described below or a properly transmitted agent’s message.
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The tender by a holder that is not withdrawn prior to the expiration time and our acceptance of that tender will constitute an agreement between the holder and us in accordance with the terms and subject to the conditions described in this prospectus and in the letter of transmittal.
THE METHOD OF DELIVERY OF ORIGINAL NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK. RATHER THAN MAIL THESE ITEMS, WE RECOMMEND THAT YOU USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO ENSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION TIME. YOU SHOULD NOT SEND THE LETTER OF TRANSMITTAL OR ORIGINAL NOTES TO US. YOU MAY REQUEST YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE ABOVE TRANSACTIONS FOR YOU.
How to Tender if You Are a Beneficial Owner
If you beneficially own Original Notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender those Original Notes, you should contact the registered holder as soon as possible and instruct the registered holder to tender on your behalf. If you are a beneficial owner and wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your Original Notes, either:
make appropriate arrangements to register ownership of the Original Notes in your name, or
obtain a properly completed bond power from the registered holder of your Original Notes.
The transfer of registered ownership may take considerable time and may not be completed prior to the expiration time.
Signatures and Signature Guarantees
You must have signatures on a letter of transmittal or a notice of withdrawal described below under “—Withdrawal of Tenders” guaranteed by an eligible institution unless the Original Notes are tendered:
by a registered holder who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or
for the account of an eligible institution.
An “eligible institution” is member firm of a registered national securities exchange or of the Financial Industry Regulatory Authority, Inc., a commercial bank or trust company having an office or correspondent in the United States, or an eligible guarantor institution within the meaning of Rule 17Ad-15 under the Exchange Act, that is a member of one of the recognized signature guarantee programs identified in the letter of transmittal.
When Endorsements or Bond Powers Are Needed
If a person other than the registered holder of any Original Notes signs the letter of transmittal, the Original Notes must be endorsed or accompanied by a properly completed bond power. The registered holder must sign the bond power as the registered holder’s name appears on the Original Notes. An eligible institution must guarantee that signature.
If the letter of transmittal or any Original Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a fiduciary or representative capacity, those persons should so indicate when signing. Unless we waive this requirement, they also must submit evidence satisfactory to us of their authority to deliver the letter of transmittal.
Tendering Through DTC’s Automated Tender Offer Program
The exchange agent and DTC have confirmed that any financial institution that is a participant in DTC’s system may use DTC’s automated tender offer program to tender. Accordingly, participants in the program may, instead of physically completing and signing the letter of transmittal and delivering it to the exchange agent, transmit their acceptance of the exchange offer electronically. They may do so by causing DTC to transfer the Original Notes to the exchange agent in accordance with its procedures for transfer. DTC will then send an agent’s message to the exchange agent.
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An agent’s message is a message transmitted by DTC to and received by the exchange agent and forming part of the book-entry confirmation, stating that:
DTC has received an express acknowledgment from a participant in DTC’s automated tender offer program that is tendering Original Notes that are the subject of such book-entry confirmation;
the participant has received and agrees to be bound by the terms of the letter of transmittal; and
we may enforce the agreement against such participant.
Determinations Under the Exchange Offer
We will determine at our sole discretion all questions as to the validity, form, eligibility, time of receipt, acceptance of tendered Original Notes and withdrawal of tendered Original Notes. Our determination will be final and binding. We reserve the absolute right to reject any Original Notes not properly tendered or any Original Notes our acceptance of which, in the opinion of our counsel, might be unlawful. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties.
Unless waived, any defects or irregularities in connection with tenders of Original Notes must be cured within such time as we determine. Neither we, the exchange agent nor any other person will be under any duty to give notification of defects or irregularities with respect to tenders of Original Notes, nor will we or those persons incur any liability for failure to give such notification. Tenders of Original Notes will not be deemed made until such defects or irregularities have been cured or waived. Any Original Notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration time.
When We Will Issue Exchange Notes
In all cases, we will issue Exchange Notes for Original Notes that we have accepted for exchange in the exchange offer only after the exchange agent timely receives:
Original Notes or a timely book-entry confirmation of transfer of such Original Notes into the exchange agent’s account at DTC; and
a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent’s message.
Return of Original Notes Not Accepted or Exchanged
If we do not accept any tendered Original Notes for exchange for any reason described in the terms and conditions of the exchange offer or if Original Notes are submitted for a greater principal amount than the holder desires to exchange, we will return the unaccepted or non-exchanged Original Notes without expense to their tendering holder. In the case of Original Notes tendered by book-entry transfer into the exchange agent’s account at DTC according to the procedures described below, such non-exchanged Original Notes will be credited to an account maintained with DTC. These actions will occur as promptly as practicable after the expiration or termination of the exchange offer.
Your Representations to Us
By signing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things:
you hold all right, title and interest in and to the Original Notes;
you transfer all right, title and interest in the Original Notes to us in exchange for the Exchange Notes free and clear of all liens, encumbrances, or rights or interests of third parties;
any Exchange Notes to be received by you will be acquired in the ordinary course of your business;
you have no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of the Exchange Notes in violation of the provisions of the Securities Act;
you are not an “affiliate” (as defined in Rule 405 under the Securities Act) of us or any guarantor, or if you are such an affiliate, you will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable;
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you are not engaged in, and do not intend to engage in, a distribution of the Exchange Notes; and
if you are a Participating Broker-Dealer that will receive Exchange Notes for your own account in exchange for Original Notes acquired as a result of market-making or other trading activities, you will deliver a prospectus meeting the requirements of the Securities Act (or, to the extent permitted by law, make available a prospectus meeting the requirements of the Securities Act to purchasers) in connection with any resale of such Exchange Notes.
Book-Entry Transfer
The exchange agent will make a request to establish an account with respect to the Original Notes at DTC for purposes of the exchange offer promptly after the date of this prospectus. Any financial institution participating in DTC’s system may make book-entry delivery of Original Notes by causing DTC to transfer such Original Notes into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer.
Resales
Each broker-dealer that receives Exchange Notes for its own account in exchange for Original Notes, where such Original Notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act (or, to the extent permitted by law, make available a prospectus meeting the requirements of the Securities Act to purchasers) in connection with any resale of such Exchange Notes. See “Plan of Distribution.”
Withdrawal of Tenders
Except as otherwise provided in this prospectus, you may withdraw your tender at any time prior to the expiration time. For a withdrawal to be effective:
the exchange agent must receive a written notice of withdrawal at one of the addresses listed above under “Prospectus Summary—The Exchange Agent;” and
the withdrawing holder must comply with the appropriate procedures of DTC’s automated tender offer program.
Any notice of withdrawal must:
specify the name of the person who tendered the Original Notes to be withdrawn;
identify the Original Notes to be withdrawn, including the registration number or numbers and the principal amount of such Original Notes;
be signed by the person who tendered the Original Notes in the same manner as the original signature on the letter of transmittal used to deposit those Original Notes or be accompanied by documents of transfer sufficient to permit the Trustee to register the transfer in the name of the person withdrawing the tender; and
specify the name in which such Original Notes are to be registered, if different from that of the person who tendered the Original Notes.
If Original Notes have been tendered under the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Original Notes and otherwise comply with the procedures of DTC.
We will determine all questions as to the validity, form, eligibility and time of receipt of notice of withdrawal, and our determination shall be final and binding on all parties. We will deem any Original Notes so withdrawn not to have been validly tendered for exchange for purposes of the exchange offer.
Any Original Notes that have been tendered for exchange but that are not exchanged for any reason will be returned to their holder without cost to the holder, or, in the case of Original Notes tendered by book-entry transfer into the exchange agent’s account at DTC according to the procedures described above, such Original Notes will be credited to an account maintained with DTC for the Original Notes. This return or crediting will take place as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. You may retender properly withdrawn Original Notes by following one of the procedures described above under “—Procedures for Tendering” at any time on or prior to the expiration time.
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Fees and Expenses
We will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, we may make additional solicitation by facsimile, email, telephone or in person by our officers and regular employees and those of our affiliates.
We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to broker-dealers or others soliciting acceptances of the exchange offer. We will, however, pay the exchange agent reasonable and customary fees for its services and reimburse it for its related reasonable out-of-pocket expenses. We may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this prospectus, letters of transmittal and related documents to the beneficial owners of the Original Notes and in handling or forwarding tenders for exchange.
We will pay cash expenses to be incurred in connection with the exchange offer. They include:
SEC registration fees for the Exchange Notes;
fees and expenses of the exchange agent and the Trustee;
accounting and legal fees;
printing costs; and
related fees and expenses.
Transfer Taxes
If you tender your Original Notes for exchange, you will not be required to pay any transfer taxes. We will pay all transfer taxes, if any, applicable to the exchange of Original Notes in the exchange offer. The tendering holder will, however, be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:
certificates representing Exchange Notes or Original Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of the Original Notes tendered;
tendered Original Notes are registered in the name of any person other than the person signing the letter of transmittal; or
a transfer tax is imposed for any reason other than the exchange of Original Notes for Exchange Notes in the exchange offer.
If satisfactory evidence of payment of any transfer taxes payable by a tendering holder is not submitted with the letter of transmittal, the amount of the transfer taxes will be billed directly to that tendering holder. The exchange agent will retain possession of Exchange Notes with a face amount equal to the amount of the transfer taxes due until it receives payment of the taxes.
Accounting Treatment
We will record the Exchange Notes at the same carrying value as the Original Notes as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes upon completion of the exchange offer.
Consequences of Failure to Exchange
If you do not exchange your Original Notes for Exchange Notes in the exchange offer, you will remain subject to the existing restrictions on transfer of the Original Notes. In general, you may not offer or sell the Original Notes unless either they are registered under the Securities Act or the offer or sale is exempt from or not subject to registration under the Securities Act and applicable state securities laws. Except as required by the registration rights agreement, we do not intend to register resales of the Original Notes under the Securities Act. We generally have no obligation to re-offer to exchange the Exchange Notes for Original Notes following the expiration of the exchange offer. The tender of Original Notes in the exchange offer will reduce the outstanding principal amount of the Original Notes. Due to the corresponding reduction in liquidity, this may have an adverse effect on, and increase the volatility of, the market price of any Original Notes that you continue to hold. See “Risk Factors—Risks Related to the Exchange Offer—If you do not exchange your Original Notes, your Original Notes will continue to be subject to the existing transfer restrictions and you may be unable to sell your outstanding Original Notes.”
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Other
Participation in the exchange offer is voluntary, and you should carefully consider whether to accept. You are urged to consult your financial and tax advisors in making your decision on what action to take.
In the future, we may at our discretion seek to acquire untendered Original Notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. We have no present plan to acquire any Original Notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered Original Notes, except as required by the registration rights agreement.
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General
T-Mobile USA, Inc., a Delaware corporation (the “Issuer”), is offering to exchange, upon the terms and conditions set forth in this prospectus and the accompanying letter of transmittal, up to $800,000,000 in aggregate principal amount of 2.250% Senior Notes due 2026 (the “2026 Exchange Notes”), $1,100,000,000 in aggregate principal amount of 3.375% Senior Notes due 2029 (the “2029 Exchange Notes”), and $1,100,000,000 in aggregate principal amount of 3.500% Senior Notes due 2031 (the “2031 Exchange Notes” and, together with the 2026 Exchange Notes and the 2029 Exchange Notes, the “Exchange Notes”) for, in each case, an equal amount of its outstanding 2.250% Senior Notes due 2026 (the “2026 Original Notes” and collectively with the 2026 Exchange Notes, the “2026 Notes”), 3.375% Senior Notes due 2029 (the “2029 Original Notes” and collectively with the 2029 Exchange Notes, the “2029 Notes”), and 3.500% Senior Notes due 2031 (the “2031 Original Notes” and collectively with the 2031 Exchange Notes, the “2031 Notes” and the 2031 Original Notes together with the 2026 Original Notes and the 2029 Original Notes, the “Original Notes” and collectively with the Exchange Notes, the “Notes”).
The Original Notes were issued, and the Exchange Notes will be issued, under a base indenture (the “Base Indenture”), dated as of April 28, 2013, among the Issuer, certain Guarantors and Deutsche Bank Trust Company Americas, as trustee (together with its successors and assigns, the “Trustee”), as supplemented (i) with respect to the 2026 Notes by the Forty-Third Supplemental Indenture, dated as of January 14, 2021 (the “2026 Notes Supplemental Indenture”), (ii) with respect to the 2029 Notes by the Forty-Seventh Supplemental Indenture, dated as of March 23, 2021 (the “2029 Notes Supplemental Indenture”) and (iii) with respect to the 2031 Notes by the Forty-Eighth Supplemental Indenture, dated as of March 23, 2021 (the “2031 Notes Supplemental Indenture” and each of the 2026 Notes Supplemental Indenture, the 2029 Notes Supplemental Indenture and the 2031 Notes Supplemental Indenture, with respect to the applicable series, the “Supplemental Indenture”), each among the Issuer, T-Mobile US, Inc., a Delaware corporation and the direct parent company of the Issuer (“Parent”), the Subsidiary Guarantors, the Trustee, Deutsche Bank Trust Company Americas, as paying agent and Deutsche Bank Trust Company Americas, as registrar and transfer agent.
The 2026 Original Notes were an additional issuance of the 2.250% Senior Notes due 2026 issued by the Issuer in an aggregate principal amount of $1,000,000,000 on January 14, 2021 (the “Existing Registered 2026 Notes”) in an offering registered pursuant to the Securities Act of 1933, as amended (the “Securities Act”). The 2026 Original Notes are consolidated with and form a single series with the Existing Registered 2026 Notes and have the same respective terms except for the settlement date and offering price, and except that the Existing Registered 2026 Notes generally are freely tradable and do not contain certain terms with respect to registration rights and additional interest. However, the 2026 Original Notes are not fungible with the Existing Registered 2026 Notes, and unless and until exchanged for 2026 Exchange Notes pursuant to this exchange offer, the 2026 Original Notes will have separate CUSIP numbers from, and will not be fungible with, the Existing Registered 2026 Notes.
The 2029 Original Notes were an additional issuance of the 3.375% Senior Notes due 2029 issued by the Issuer in an aggregate principal amount of $1,250,000,000 on March 23, 2021 (the “Existing Registered 2029 Notes”) in an offering registered pursuant to the Securities Act. The 2029 Original Notes are consolidated with and form a single series with the Existing Registered 2029 Notes and have the same respective terms except for the settlement date and offering price, and except that the Existing Registered 2029 Notes generally are freely tradable and do not contain certain terms with respect to registration rights and additional interest. However, the 2029 Original Notes are not fungible with the Existing Registered 2029 Notes, and unless and until exchanged for 2029 Exchange Notes pursuant to this exchange offer, the 2029 Original Notes will have separate CUSIP numbers from, and will not be fungible with, the Existing Registered 2029 Notes.
The 2031 Original Notes were an additional issuance of the 3.500% Senior Notes due 2031 issued by the Issuer in an aggregate principal amount of $1,350,000,000 on March 23, 2021 (the “Existing Registered 2031 Notes”) in an offering registered pursuant to the Securities Act. The 2031 Original Notes are consolidated with and form a single series with the Existing Registered 2031 Notes and have the same respective terms except for the settlement date and offering price, and except that the Existing Registered 2031 Notes generally are freely tradable and do not contain certain terms with respect to registration rights and additional interest. However, the 2031 Original Notes are not fungible with the Existing Registered 2031 Notes, and unless and until exchanged for 2031 Exchange Notes pursuant to this exchange offer, the 2031 Original Notes will have separate CUSIP numbers from, and will not be fungible with, the Existing Registered 2031 Notes.
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In this Description of Notes, the term “Indenture” refers to the Base Indenture as supplemented separately by the Supplemental Indenture for the applicable series of Notes. The terms of the Notes of each series include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).
In this Description of Notes, (i) the “Issuer” refers only to T-Mobile USA, Inc. and not to any of its Subsidiaries and (ii) “Parent” refers only to T-Mobile US, Inc. and not to any of its Subsidiaries.
The obligations and covenants of the Issuer described in this Description of Notes are only of the Issuer, and not of Parent. Although Parent is a Guarantor of the Original Notes and will be a Guarantor of the Exchange Notes, Parent and any of its Subsidiaries that are not the Issuer or the Issuer’s Restricted Subsidiaries generally are not and will not be subject to any of the obligations and covenants described hereunder.
The following description is a summary of the material provisions of the Indenture applicable to both the Exchange Notes and the Original Notes. As such, when we refer to a series of Notes, we are describing the material provisions of the corresponding series of both the Original Notes and the Exchange Notes, and when we refer to the Notes, we are describing the material provisions of both the Original Notes and the Exchange Notes. The following description does not restate the terms of the Indenture in their entirety. We urge you to read the Indenture in its entirety because it, and not this Description of Notes, defines your rights as a holder of Original Notes or Exchange Notes, as applicable. For more information on how you can obtain a copy of the Base Indenture and the Supplemental Indentures, see “Where You Can Find More Information.” You can find the definitions of certain terms used in this Description of Notes under the caption “—Certain Definitions” below. Certain defined terms used in this Description of Notes but not defined below under “—Certain Definitions” have the meanings assigned to them in the Indenture.
The registered holder of a Note will be treated as the owner of such Note for all purposes. Only registered holders will have rights under the Indenture. The Original Notes were issued initially in a private transaction that was not subject to the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”).
Brief Description of the Notes and the Note Guarantees
The Notes
The Original Notes of each series are, and the Exchange Notes of each series will be:
general unsecured, unsubordinated obligations of the Issuer;
senior in right of payment to any future Indebtedness of the Issuer to the extent that such future Indebtedness provides by its terms that it is subordinated in right of payment to the Notes;
equal in right of payment with any of the Issuer’s existing and future Indebtedness and other liabilities that are not by their terms subordinated in right of payment to the Notes, including, without limitation, the obligations under the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes, the Existing Sprint Unsecured Notes, the Credit Agreement and the Tower Obligations;
effectively subordinated to all existing and future secured indebtedness of the Issuer, including, without limitation, obligations under the Outstanding T-Mobile Secured Notes and the Credit Agreement, in each case to the extent of the value of the Issuer’s assets securing such indebtedness;
structurally subordinated to all of the liabilities and other obligations of the Issuer’s subsidiaries that are not obligors with respect to the Notes, including the Existing Sprint Spectrum-Backed Notes, factoring arrangements and tower obligations; and
unconditionally guaranteed on a senior unsecured basis by Parent and the Subsidiary Guarantors.
See “Risk Factors—Risks Related to the Notes—The Notes and the Guarantees will be unsecured and effectively subordinated to the Issuer’s and the guarantors’ existing and future secured indebtedness, including the Outstanding T-Mobile Secured Notes and borrowings under the Credit Agreement” and “Risk Factors—Risks Related to the Notes—The Notes and the Guarantees will be structurally subordinated to the indebtedness and other liabilities of the Issuer’s non-guarantor subsidiaries.”
The Note Guarantees
The Original Notes are, and the Exchange Notes will be, guaranteed by (i) Parent and any Wholly-Owned Subsidiary of the Issuer that (x) is not an Excluded Subsidiary and (y) is an obligor under (1) the Credit Agreement
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or (2) assuming such Subsidiary is not an Unrestricted Subsidiary, any capital markets debt securities in an aggregate principal amount in excess of $500.0 million and (ii) any future direct or indirect Subsidiary of Parent or any Subsidiary of Parent that directly or indirectly owns Capital Stock of the Issuer. Such entities are expected to include the Issuer’s Domestic Subsidiaries that are not Excluded Subsidiaries. These Note Guarantees are (with respect to Original Notes) or will be (with respect to Exchange Notes) joint and several obligations of the Guarantors. The obligations of each Guarantor under its Note Guarantee is (with respect to Original Notes) or will be (with respect to Exchange Notes) limited as necessary to prevent that Note Guarantee from constituting a fraudulent conveyance under applicable law. See “Risk Factors—Risks Related to the Notes—The Guarantees may be avoidable and therefore not be enforceable because of fraudulent conveyance or fraudulent transfer laws.”
Each Note Guarantee of the Notes by a Guarantor is (with respect to Original Notes) or will be (with respect to Exchange Notes):
a general unsecured, unsubordinated obligation of such Guarantor;
senior in right of payment to any future Indebtedness of that Guarantor to the extent that such future Indebtedness provides by its terms that it is subordinated in right of payment to such Guarantor’s Note Guarantee;
equal in right of payment with any of the Guarantor’s existing and future Indebtedness and other liabilities that are not by their terms subordinated in right of payment to the Notes, including, without limitation, obligations under the Outstanding T-Mobile Secured Notes, the other Existing T-Mobile Unsecured Notes, the Existing Sprint Unsecured Notes and the Credit Agreement;
effectively subordinated to any UnsecuredSubsidiary Guarantor’s existing and future secured indebtednessIndebtedness, including, without limitation, obligations under the Outstanding T-Mobile Secured Notes and the Credit Agreement, in each case to the extent of the value of the assets of such UnsecuredSubsidiary Guarantor constituting collateral securing such Indebtedness. AssumingIndebtedness; and
structurally subordinated to all of the Indebtedness and other obligations of any Subsidiaries of such Guarantor that on December 31, 2020, we had completedare not obligors with respect to the Q1 Notes Issuances and the Q1 Redemption, the Unsecured Guarantors would have had approximately $0.3 billion of total assets and approximately $69.4 billion in indebtedness that they had issued or guaranteed on an unsecured basis, $0 in indebtedness that they had issued or guaranteed on a secured basis, and approximately $4.6 billion in payment obligations under the Existing Sprint Spectrum Lease that they had guaranteed.Notes.
See “Risk Factors—Risks Related to the Notes—The UnsecuredNotes and the Guarantees will be unsecured and effectively subordinated to the Unsecured Guarantors’Issuer’s and the guarantors’ existing and future secured indebtedness.indebtedness, including the Outstanding T-Mobile Secured Notes and borrowings under the Credit Agreement” and “Risk Factors—Risks Related to the Notes—The Notes and the Guarantees will be structurally subordinated to the indebtedness and other liabilities of the Issuer’s non-guarantor subsidiaries.”
The Issuer’s existing and future Subsidiaries are or will be required to guarantee the Notes only under the circumstances described below under the subheading “—Certain Covenants—Additional Note Guarantees.” Excluded AssetsIn the event of a bankruptcy, liquidation or reorganization of any non-guarantor Subsidiaries, the non-guarantor Subsidiaries will include,pay their trade creditors and the holders of their other debt and obligations before they will be able to distribute any of their assets to the Issuer.
As of the date of this prospectus, all of the Issuer’s Subsidiaries other than Connect CCC, LLC, Sprint Federal Operations, LLC, T-Mobile Airtime Funding LLC, T-Mobile Handset Funding LLC and T-Mobile Ventures LLC are “Restricted Subsidiaries.” However, under the circumstances described below under the caption “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries,” the Issuer will be permitted to designate certain of its Subsidiaries as “Unrestricted Subsidiaries.” The Issuer’s Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture. The Issuer’s Unrestricted Subsidiaries will not guarantee the Notes.
Except as otherwise provided in the following paragraph, prior to the occurrence of an Investment Grade Event Election, a Guarantor of the Notes of any series (other than Parent) may not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person, other than the Issuer or another Guarantor, unless:
| (1) | immediately after giving effect to that transaction, no Default or Event of Default exists in respect of the Notes of such series; and |
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| (2) | either: |
| (a) | subject to the following paragraph and if it is not already a Guarantor of the Notes of such series, the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under the Indenture and its Note Guarantee of the Notes of such series pursuant to a supplemental indenture; or |
| (b) | such sale or other disposition complies with the “Asset Sale” provisions of the Indenture (it being understood that only such portion of the Net Proceeds as is or is required to be applied on or before the date of such release in accordance with the terms of the Indenture needs to be so applied). |
The Note Guarantee of a Guarantor will be automatically and unconditionally released in respect of the Notes of any series:
| (1) | only in the case of a Subsidiary Guarantor, at such time as such Subsidiary Guarantor (i) is not, (ii) is released or relieved as, or (iii) ceases (or substantially concurrently will cease) to be, a borrower or guarantor under the Credit Agreement and under the Existing T-Mobile Secured Notes, except by or as a result of payment under such guarantee or direct obligation; |
| (2) | only in the case of a Subsidiary Guarantor, in connection with any sale or other disposition of all or substantially all of the assets of that Subsidiary Guarantor (including by way of merger or consolidation) to a Person that is not (either before or after giving effect to such transaction) the Issuer or a Restricted Subsidiary of the Issuer, if the sale or other disposition is not prohibited by the “Asset Sale” provisions of the Indenture; |
| (3) | only in the case of a Subsidiary Guarantor, if for any reason such Subsidiary Guarantor ceases to be a Wholly-Owned Subsidiary of the Issuer; provided, that any Subsidiary Guarantor that ceases to constitute a Subsidiary Guarantor or becomes an Excluded Subsidiary solely by virtue of no longer being a Wholly-Owned Subsidiary (a “Partially Disposed Subsidiary”) shall only be released from its Note Guarantee to the extent that the other person taking an equity interest in such Partially Disposed Subsidiary is not an affiliate of the Issuer that is controlled by Parent, DT or any of their respective subsidiaries or an employee of any of the foregoing; |
| (4) | upon the legal defeasance, covenant defeasance, or satisfaction and discharge of the Indenture as provided below under the captions “—Legal Defeasance and Covenant Defeasance” and “—Satisfaction and Discharge”; |
| (5) | upon the liquidation or dissolution of any Subsidiary Guarantor, provided that no Event of Default has occurred that is continuing; |
| (6) | upon the merger or consolidation of any Guarantor with and into the Issuer or another Guarantor that is the surviving Person in such merger or consolidation; |
| (7) | in the case of a Subsidiary Guarantor, at the time of an Investment Grade Event Election; or |
| (8) | if the Issuer designates any Restricted Subsidiary that is a Guarantor to be an Unrestricted Subsidiary in accordance with the applicable provisions of the Indenture. |
Principal, Maturity and Interest
The Issuer may issue further additional Notes of any series from time to time, and such additional Notes of such series may be issued under the Base Indenture as supplemented either by the Supplemental Indenture for such series of Notes or one or more other supplemental indentures. The 2026 Original Notes issued by the Issuer in an aggregate principal amount of $800,000,000 on May 13, 2021, the 2029 Original Notes issued by the Issuer in an aggregate principal amount of $1,100,000,000 on May 13, 2021, and the 2031 Original Notes issued by the Issuer in an aggregate principal amount of $1,100,000,000 on May 13, 2021, constitute additional Notes of the applicable series under the Indenture. Any issuance of additional Notes is subject to all of the covenants in the Indenture including the covenant described below under the caption “—Certain Covenants—Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock.” The Notes of any series and any additional Notes of such series subsequently issued, together with any Exchange Notes issued with respect to such series in accordance with the Registration Rights Agreement, will be treated as a single series for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase; provided that any additional Notes that
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are not fungible with the Notes of any series (or with any other additional Notes of that series) for U.S. federal income tax purposes will have a separate CUSIP, ISIN, common code or other identifying number, as applicable.
The Issuer issued the Original Notes, and will issue the Exchange Notes, in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.
The 2026 Notes will mature on February 15, 2026, the 2029 Notes will mature on April 15, 2029, and the 2031 Notes will mature on April 15, 2031.
Interest on the Notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid (and, in the case of Exchange Notes, interest will accrue from the date of original issuance or, if interest has already been paid on the corresponding Original Notes exchanged therefor, the date it was most recently paid on such Original Notes). If an interest payment date or the maturity date falls on a day that is not a Business Day, the related payment of principal or interest will be made on the next succeeding Business Day as if made on the date the payment was due, and no interest shall accrue for the intervening period. Interest on the Original Notes is, and interest on the Exchange Notes will be, computed on the basis of a 360-day year consisting of twelve 30-day months.
Interest on the 2026 Original Notes accrues, and interest on the 2026 Exchange Notes will accrue, at the rate of 2.250% per annum; interest on the 2029 Original Notes accrues, and interest on the 2029 Exchange Notes will accrue, at the rate of 3.375% per annum; and interest on the 2031 Original Notes accrues, and interest on the 2031 Exchange Notes will accrue, at the rate of 3.500% per annum.
Interest on the 2026 Original Notes is, and interest on the 2026 Exchange Notes will be, payable semiannually in arrears on February 15 and August 15. The Issuer will make each interest payment to the holders of record of the 2026 Notes on the immediately preceding February 1 or August 1 (whether or not a Business Day). Interest on the 2029 Original Notes and the 2031 Original Notes is, and interest on the 2029 Exchange Notes and the 2031 Exchange Notes will be, payable semiannually in arrears on April 15 and October 15. The Issuer will make each interest payment to the holders of record of the 2029 Notes and the 2031 Notes on the immediately preceding April 1 or October 1 (whether or not a Business Day).
Payments of principal of and interest on the Notes issued in book-entry form or definitive form, if any, will be made as described below under the caption “—Methods of Receiving Payments on the Notes.”
The Original Notes of each series are, and the Exchange Notes of each series initially will be, evidenced by one or more global notes deposited with a custodian for, and registered in the name of, Cede & Co., as nominee of The Depository Trust Company (“DTC”).
Listing
The Notes are not, and the Issuer does not intend to apply for the Notes to be, listed on any securities exchange or to arrange for the Notes to be quoted on any quotation system.
Methods of Receiving Payments on the Notes
If a holder of a definitive note has given wire transfer instructions to the Issuer and the Issuer is the paying agent, the Issuer will pay all principal, interest and premium, if any, on that holder’s Notes in accordance with those instructions until given written notice to the contrary. All other payments on the Notes will be made at the Corporate Trust Office of the Trustee, unless the Issuer elects to make interest payments by check mailed to the noteholders at their address set forth in the books and records of the registrar.
Paying Agent and Registrar for the Notes
The Trustee will initially act as paying agent, registrar and transfer agent where Notes may be presented for payment. The Issuer may change the paying agent, registrar or transfer agent without prior notice to the holders of the Notes, and the Issuer or any of its Subsidiaries may act as paying agent or registrar.
Transfer and Exchange
Except as set forth below, the global notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee.
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A holder of a definitive note may transfer or exchange Notes in accordance with the provisions of the Indenture. The registrar and the Trustee may require a holder, among other things, Permitted Receivables Financing Assets (as definedto furnish appropriate endorsements and transfer documents in connection with a transfer of Notes. Holders will be required to pay all taxes relating to, arising out of, or in connection with such transfer. The Issuer will not be required to transfer or exchange any Note selected for redemption. Also, the Issuer will not be required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.
Mandatory Redemption; Offers to Purchase; Open Market Purchases
The Issuer will not be required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under “Descriptioncertain circumstances, the Issuer may be required to offer to purchase Notes as described below under the caption “—Repurchase at the Option of Notes—Certain Definitions”).Holders.”
As market conditions warrant, the Issuer and its affiliates may from time to time seek to purchase their outstanding debt securities or loans, including the Notes, in privately negotiated or open market transactions, by tender offer or otherwise. Subject to any applicable limitations contained in the agreements governing such indebtedness, any purchases made by the Issuer may be funded by the use of cash on its balance sheet or the incurrence of new secured or unsecured debt, including borrowings under credit facilities. The amounts involved in any such purchase transactions, individually or in the aggregate, may be material. Any such purchases may be with respect to a substantial amount of a particular class or series of debt, with the attendant reduction in the trading liquidity of such class or series.
Optional Redemption
2026 Notes
At any time prior to February 15, 2023, the Issuer may on any one or more occasions redeem up to 40% of the aggregate principal amount of the 2026 Notes issued under the applicable Indenture, upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 102.250% of the principal amount of 2026 Notes redeemed plus accrued and unpaid interest, if any, thereon to, but not including, the applicable redemption date, subject to the rights of holders of 2026 Notes on the relevant record date to receive interest due on the relevant interest payment date for periods prior to such redemption date, with an amount equal to the net cash proceeds of one or more sales of Equity Interests (other than Disqualified Stock) of the Issuer or contributions to the Issuer’s common equity capital made with an amount equal to the net cash proceeds of one or more sales of Equity Interests (other than Disqualified Stock) of Parent; provided that:
at least 50% of the aggregate principal amount of the 2026 Notes issued under the applicable Indenture (excluding 2026 Notes held by the Issuer and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and
the redemption occurs within 180 days of the date of the closing of such sale of Equity Interests by the Issuer or the date of contribution to the Issuer’s common equity capital made with an amount equal to the net cash proceeds of one or more sales of Equity Interests of Parent.
On or after February 15, 2023, the Issuer may redeem all or a part of the 2026 Notes, upon not less than 10 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of the principal amount of 2026 Notes redeemed) set forth below plus accrued and unpaid interest, if any, on the 2026 Notes redeemed to, but not including, the applicable redemption date, if redeemed during the twelve month period beginning on February 15 of the years indicated below, subject to the rights of holders of 2026 Notes on the relevant record date to receive interest due on the relevant interest payment date for periods prior to such redemption date:
Year | | | Percentage |
2023 | | | 101.125% |
2024 | | | 100.563% |
2025 and thereafter | | | 100.000% |
At any time prior to February 15, 2023, the Issuer may also redeem all or a part of the 2026 Notes, upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of 2026 Notes redeemed plus the Applicable Premium for the 2026 Notes as of, and accrued and unpaid interest, if any, to, but not including, the redemption date, subject to the rights of holders of 2026 Notes on the relevant record date to receive interest due on the relevant interest payment date for periods prior to such redemption date.
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Unless the Issuer defaults in the payment of the redemption price, interest will cease to accrue on the 2026 Notes or portions thereof called for redemption on the redemption date.
2029 Notes
At any time prior to April 15, 2024, the Issuer may on any one or more occasions redeem up to 40% of the aggregate principal amount of the 2029 Notes issued under the applicable Indenture, upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 103.375% of the principal amount of 2029 Notes redeemed plus accrued and unpaid interest, if any, thereon to, but not including, the applicable redemption date, subject to the rights of holders of 2029 Notes on the relevant record date to receive interest due on the relevant interest payment date for periods prior to such redemption date, with an amount equal to the net cash proceeds of one or more sales of Equity Interests (other than Disqualified Stock) of the Issuer or contributions to the Issuer’s common equity capital made with an amount equal to the net cash proceeds of one or more sales of Equity Interests (other than Disqualified Stock) of Parent; provided that:
at least 50% of the aggregate principal amount of the 2029 Notes issued under the applicable Indenture (excluding 2029 Notes held by the Issuer and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and
the redemption occurs within 180 days of the date of the closing of such sale of Equity Interests by the Issuer or the date of contribution to the Issuer’s common equity capital made with an amount equal to the net cash proceeds of one or more sales of Equity Interests of Parent.
On or after April 15, 2024, the Issuer may redeem all or a part of the 2029 Notes, upon not less than 10 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of the principal amount of 2029 Notes redeemed) set forth below plus accrued and unpaid interest, if any, on the 2029 Notes redeemed to, but, not including, the applicable redemption date, if redeemed during the twelve month period beginning on April 15 of the years indicated below, subject to the rights of holders of 2029 Notes on the relevant record date to receive interest on the relevant interest payment date for periods prior to such redemption date:
Year | | | Percentage |
2024 | | | 101.688% |
2025 | | | 100.844% |
2026 and thereafter | | | 100.000% |
At any time prior to April 15, 2024, the Issuer may also redeem all or a part of the 2029 Notes, upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of 2029 Notes redeemed plus the Applicable Premium for the 2029 Notes as of, and accrued and unpaid interest, if any, to, but not including, the redemption date, subject to the rights of holders of 2029 Notes on the relevant record date to receive interest due on the relevant interest payment date for periods prior to such redemption date.
Unless the Issuer defaults in the payment of the redemption price, interest will cease to accrue on the 2029 Notes or portions thereof called for redemption on the redemption date.
2031 Notes
At any time prior to April 15, 2024, the Issuer may on any one or more occasions redeem up to 40% of the aggregate principal amount of the 2031 Notes issued under the applicable Indenture, upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 103.500% of the principal amount of 2031 Notes redeemed plus accrued and unpaid interest, if any, thereon to, but not including, the applicable redemption date, subject to the rights of holders of 2031 Notes on the relevant record date to receive interest due on the relevant interest payment date for periods prior to such redemption date, with an amount equal to the net cash proceeds of one or more sales of Equity Interests (other than Disqualified Stock) of the Issuer or contributions to the Issuer’s common equity capital made with an amount equal to the net cash proceeds of one or more sales of Equity Interests (other than Disqualified Stock) of Parent; provided that:
at least 50% of the aggregate principal amount of the 2031 Notes issued under the applicable Indenture (excluding 2031 Notes held by the Issuer and its Subsidiaries) remains outstanding immediately after the occurrence of such redemption; and
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the redemption occurs within 180 days of the date of the closing of such sale of Equity Interests by the Issuer or the date of contribution to the Issuer’s common equity capital made with an amount equal to the net cash proceeds of one or more sales of Equity Interests of Parent.
On or after April 15, 2026, the Issuer may redeem all or a part of the 2031 Notes, upon not less than 10 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of the principal amount of 2031 Notes redeemed) set forth below plus accrued and unpaid interest, if any, on the 2031 Notes redeemed to, but, not including, the applicable redemption date, if redeemed during the twelve month period beginning on April 15 of the years indicated below, subject to the rights of holders of 2031 Notes on the relevant record date to receive interest on the relevant interest payment date for periods prior to such redemption date:
Year | | | Percentage |
2026 | | | 101.750% |
2027 | | | 101.167% |
2028 | | | 100.583% |
2029 and thereafter | | | 100.000% |
At any time prior to April 15, 2026, the Issuer may also redeem all or a part of the 2031 Notes, upon not less than 10 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of 2031 Notes redeemed plus the Applicable Premium for the 2031 Notes as of, and accrued and unpaid interest, if any, to, but not including, the redemption date, subject to the rights of holders of 2031 Notes on the relevant record date to receive interest due on the relevant interest payment date for periods prior to such redemption date.
Unless the Issuer defaults in the payment of the redemption price, interest will cease to accrue on the 2031 Notes or portions thereof called for redemption on the redemption date.
For the avoidance of doubt, the requirement to pay any Applicable Premium shall not arise in connection with any recovery of amounts due as a result of any breach of any covenant contained in the Indenture or the applicable Notes except where the transaction resulting in such breach was consummated with the intent to breach such covenant.
Prescription
Under New York’s statute of limitations, any legal action to enforce our payment obligations evidenced by the Notes must be commenced within six years after the payment thereof is due; thereafter our payment obligations will generally become unenforceable. In addition, the Sprint Spectrum Portfolio (as definedIndenture will prohibit the Trustee and the holders from accelerating the obligations under “Descriptionthe Notes with respect to or as a result of Otheran Event of Default consisting of any action taken, and reported publicly or to holders of Notes, more than two years prior to the declaration of such acceleration.
Repurchase at the Option of Holders
Change of Control Triggering Event
If a Change of Control Triggering Event occurs with respect to any series of Notes, each holder of outstanding Notes of such series will have the right to require the Issuer to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that holder’s Notes of such series pursuant to a Change of Control Offer on the terms set forth in the Indenture. In the Change of Control Offer, the Issuer will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest, if any, on the Notes repurchased to, but not including, the date of purchase, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date for periods prior to such repurchase date (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event, the Issuer will send a notice (the “Change of Control Offer”) to each holder of Notes to which such Change of Control Triggering Event applies and the Trustee describing the transaction or transactions and identifying the rating decline that together constitute the Change of Control Triggering Event and offering to repurchase the Notes of such series on the Change of Control Payment Date specified in the notice, which date will be no earlier than 10 days and no later than 60 days from the date such notice is sent (the “Change of Control Payment Date”), pursuant to the procedures required by the Indenture and described in such notice. The Issuer will comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection
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with the repurchase of the Notes as a result of a Change of Control Triggering Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control Triggering Event provisions of the Indenture, or compliance with the Change of Control Triggering Event provisions of the Indenture would constitute a violation of any such laws or regulations, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control Triggering Event provisions of the Indenture by virtue of such compliance. In connection with the tender of any Notes with respect to a Change of Control Triggering Event, the tendering holder shall provide good title to the Notes, free and clear of all liens and encumbrances, and shall represent and warrant that such holder is presenting good title, free and clear of all liens and encumbrances, and such other representations and warranties as are customary.
On the Change of Control Payment Date, the Issuer will, to the extent lawful:
| (1) | accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; |
| (2) | deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and |
| (3) | deliver or cause to be delivered to the paying agent the Notes properly accepted together with an officers’ certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Issuer. |
The paying agent will promptly make payment, to each holder of Notes properly tendered, of the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder, a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each new Note will be in a principal amount equal to $2,000 or an integral multiple of $1,000 in excess thereof. The Issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.
The provisions described above that require the Issuer to make a Change of Control Offer following a Change of Control Triggering Event will be applicable whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control Triggering Event, the Indenture does not contain provisions that permit the holders of the Notes to require, or otherwise provide, that the Issuer repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction.
Notwithstanding the foregoing, the Issuer will not be required to make a Change of Control Offer with respect to any series of the Notes upon a Change of Control Triggering Event if (1) a third party makes the Change of Control Offer for such series of Notes in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes of such series properly tendered and not withdrawn under the Change of Control Offer, or (2) notice of redemption with respect to such series has been given pursuant to the Indenture as described above under the caption “—Optional Redemption,” unless and until there is a default in payment of the applicable redemption price.
A Change of Control Offer may be made in advance of a Change of Control Triggering Event, and conditioned upon such Change of Control Triggering Event, if a definitive agreement has been executed for a transaction that would constitute a Change of Control at the time of making of the Change of Control Offer.
In the event that holders of not less than 90% of the aggregate principal amount of the outstanding Notes of a series accept a Change of Control Offer and the Issuer purchases all of the Notes of such series held by such holders, the Issuer will have the right, upon not less than 10 nor more than 60 days’ notice, given not more than 30 days following the purchase pursuant to the Change of Control Offer described above, to redeem all of the Notes of such series that remain outstanding following such purchase at a redemption price equal to the Change of Control Payment plus, to the extent not included in the Change of Control Payment, accrued and unpaid interest, if any, on the Notes of such series that remain outstanding, to, but not including, the date of redemption (subject to the right of holders of record on the relevant record date to receive interest due on an interest payment date that is on or prior to the redemption date).
The definition of Change of Control includes a phrase relating to the direct or indirect sale, lease, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of, prior to the occurrence of an Investment Grade Event Election, the Issuer and its Restricted Subsidiaries taken as a whole, and following the
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occurrence of an Investment Grade Event Election, Parent and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of Notes to require the Issuer to repurchase its Notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of the Issuer and its Restricted Subsidiaries taken as a whole to another Person or group may be uncertain.
Asset Sales
The Issuer will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
| (1) | the Issuer (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and |
| (2) | at least 75% of the consideration received by the Issuer or such Restricted Subsidiary in the Asset Sale and all other Asset Sales since the Closing Date is in the form of cash, Cash Equivalents or Replacement Assets or a combination thereof. For purposes of this provision, each of the following will be deemed to be cash: |
| (a) | any liabilities, as shown on the Issuer’s most recent consolidated balance sheet (or as would be shown on the Issuer’s consolidated balance sheet as of the date of such Asset Sale), of the Issuer or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Note Guarantees) that are assumed by the transferee of any such assets pursuant to a novation agreement that releases the Issuer or such Restricted Subsidiary from further liability; |
| (b) | any securities, notes or other obligations received by the Issuer, or any such Restricted Subsidiary, from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash, Cash Equivalents or Replacement Assets within 90 days after such Asset Sale, to the extent of the cash, Cash Equivalents or Replacement Assets received in that conversion; |
| (c) | consideration consisting of Indebtedness of the Issuer or a Restricted Subsidiary (other than Subordinated Indebtedness) received after the Series Issue Date from Persons who are not the Issuer or any Restricted Subsidiary; and |
| (d) | any Designated Non-cash Consideration received by the Issuer or any Restricted Subsidiary in such Asset Sale having an aggregate Fair Market Value (as determined in good faith by the Issuer), taken together with all other Designated Non-cash Consideration received pursuant to this clause (d) that is at any time outstanding, not to exceed 5% of the Issuer’s Total Assets (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value). |
Notwithstanding the foregoing, the 75% limitation referred to above shall be deemed satisfied with respect to any Asset Sale in which the cash, Cash Equivalents or Replacement Assets portion of the consideration received therefrom, determined in accordance with the foregoing provision on an after-tax basis, is equal to or greater than what the after-tax proceeds would have been had such Asset Sale complied with the aforementioned 75% limitation.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Issuer or a Restricted Subsidiary may apply an amount equal to such Net Proceeds:
| (1) | to purchase Replacement Assets; |
| (2) | to prepay, repay, defease, redeem, purchase or otherwise retire Indebtedness and other Obligations under a Credit Facility or Indebtedness secured by property that is subject to such Asset Sale and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; |
| (3) | to prepay, repay, defease, redeem, purchase or otherwise retire Obligations under Indebtedness that is not Subordinated Indebtedness other than the Indebtedness described in clause (2) above (and, if the Indebtedness repaid is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto); provided that the Issuer shall equally and ratably prepay, repay, defease, redeem, purchase or |
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otherwise retire (or offer to prepay, repay, defease, redeem, purchase or otherwise retire, as applicable) Obligations under the Notes on a pro rata basis for no less than 100% of the principal amount thereof plus accrued and unpaid interest, if any, thereon to, but not including, the applicable redemption date; or
| (4) | if the assets subject to such Asset Sale are the property or assets of a Restricted Subsidiary that is not a Guarantor, to prepay, repay, defease, redeem, purchase or otherwise retire Indebtedness of such Restricted Subsidiary or Indebtedness of any other Restricted Subsidiary that is not a Guarantor, other than Indebtedness owed to the Issuer or any Restricted Subsidiary. |
Notwithstanding the foregoing, if within 365 days after the receipt of any Net Proceeds from an Asset Sale, the Issuer or a Restricted Subsidiary enters into a binding written agreement committing the Issuer or such Restricted Subsidiary, subject to customary conditions, to an application of funds of the kind described in clause (1) above, the Issuer or such Restricted Subsidiary shall be deemed not to be in violation of the preceding paragraph so long as such application of funds is consummated within 545 days of the receipt of such Net Proceeds.
Pending the final application of any Net Proceeds of an Asset Sale, the Issuer may temporarily reduce revolving credit borrowings or otherwise use the Net Proceeds in any manner that is not prohibited by the Indenture.
An amount equal to any Net Proceeds from Asset Sales that are not applied or invested as provided in the third paragraph of this covenant will constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $100.0 million, within 20 days thereof, the Issuer shall apply the entire aggregate amount of unutilized Excess Proceeds (not only the amount in excess of $100.0 million) to make an offer (an “Asset Sale Offer”) to all holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions requiring the Issuer to make an offer to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and Certain Financing Transactions—purchase or redeem such other pari passu Indebtedness that may be purchased or redeemed out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount of the Notes and such other pari passu Indebtedness that may be purchased or redeemed with Excess Proceeds, plus accrued and unpaid interest, if any, to, but not including, the date of consummation of the purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Issuer and its Restricted Subsidiaries may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered in response to such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and the Issuer will select such other pari passu Indebtedness to be purchased or redeemed on a pro rata basis unless otherwise required by law or applicable stock exchange or depositary requirements. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero.
The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of the Indenture, or compliance with the Asset Sale provisions of the Indenture would constitute a violation of any such laws or regulations, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of the Indenture by virtue of such compliance.
The agreements governing the Issuer’s other Indebtedness contain, and future agreements may contain, prohibitions of certain events, including events that would constitute a Change of Control or an Asset Sale and may prohibit repurchases of or other prepayments in respect of the Notes. The exercise by the holders of the Notes of their right to require the Issuer to repurchase the Notes upon a Change of Control Triggering Event or an Asset Sale could cause a default under these other agreements, even if the Change of Control Triggering Event or Asset Sale itself does not, due to the financial effect of such repurchases or other prepayments on the Issuer. In the event a Change of Control Triggering Event or Asset Sale occurs at a time when the Issuer is prohibited from purchasing Notes, the Issuer could seek the consent of the holders of such Indebtedness to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Issuer does not obtain a consent or repay those borrowings, the Issuer will remain prohibited from purchasing Notes. In that case, the Issuer’s failure to purchase tendered Notes would constitute an Event of Default under the applicable Indenture that could, in turn, constitute a default under the other Indebtedness. Finally, the Issuer’s ability to pay cash to the holders of Notes upon a repurchase may be limited by the Issuer’s then existing financial resources. See “Risk Factors—Risks Related to the Notes—The
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indentures governing the Notes, the Outstanding T-Mobile Secured Notes, the other Existing Sprint Note Facility”) securingT-Mobile Unsecured Notes and the Existing Sprint Spectrum-BackedUnsecured Notes, the Credit Agreement and other financing arrangements include or will include restrictive covenants that limit our operating flexibility.”
Selection and Notice
If less than all of the Notes of a series are to be redeemed, the Trustee will select Notes of such series for redemption on a pro rata basis unless otherwise required by law or applicable stock exchange or depositary requirements.
No Notes of $2,000 or less can be redeemed in part. Notices of redemption will be sent electronically or mailed by first class mail at least 10 but not more than 60 days before the redemption date to each holder of Notes to be redeemed at its registered address, except that redemption notices may be sent more than 60 days prior to a redemption date if the notice is pledgedissued in connection with a defeasance of the Notes of a series or a satisfaction and discharge of the Indenture with respect to secure such indebtednessseries. Any such notice of redemption may, at the Issuer’s discretion, state that such redemption is subject to one or more conditions precedent, including, but not limited to, completion of an equity offering, other offering, issuance of Indebtedness or other corporate transaction or event. In addition, if such redemption or notice is subject to satisfaction of one or more conditions precedent, such notice shall state that, in the Issuer’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied (or waived by the Issuer in its sole discretion), or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied (or waived by the Issuer in its sole discretion) by the redemption date (whether the original redemption date or the redemption date so delayed). In addition, the Issuer may provide in such notice or offer to purchase that payment of the redemption or purchase price and performance of the Issuer’s obligations with respect to such redemption or offer to purchase may be performed by another Person.
If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will not securestate the Exchange Notes.portion of the principal amount of that Note that is to be redeemed. If in definitive form a new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the holder of Notes upon cancellation of the original note. Except to the extent that a notice of redemption is conditional, Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on Notes or portions of Notes called for redemption.
use our commercially reasonable efforts to file a registration statement (which we refer to as an exchange offer registration statement) with the SEC with respect to a registered exchange offer (which we refer to as a registered exchange offer) to exchange the Original Notes for new notes of the company, guaranteed by the guarantors and having terms identical in all material respects to the Original Notes (except that the new notes will not contain terms with respect to transfer restrictions or additional interest (as defined below)); and
use our commercially reasonable efforts to cause the exchange offer registration statement to be declared effective under the Securities Act and to consummate the exchange offer not later than 60 days after such effective date.
In addition, we agreed to provide that upon the effectiveness of the exchange offer registration statement, we would promptly commence the exchange offer, whereby the Exchange Notes will contain covenants that, among other things, limit the abilitybe offered in exchange for surrender of the Original Notes, and that we will keep the registered exchange offer open for not less than 20 business days (or longer if required by applicable law including in accordance with the requirements of Regulation 14E under the Exchange Act) after the date notice of the registered exchange offer is first mailed, sent or given to the noteholders. For each note surrendered to the Issuer for exchange pursuant to the registered exchange offer, the holder of such note will receive an Exchange Note having a principal amount equal to that of the surrendered note.
We are offering the Exchange Notes under this prospectus in an exchange offer for the Original Notes to satisfy our obligations under the registration rights agreement. We refer to our offer to exchange the Exchange Notes for the Original Notes as the “exchange offer.”
Resale of Exchange Notes
Based on interpretations by the staff of the SEC, as described in no-action letters issued to third parties that are not related to us, including Morgan Stanley & Co., Inc. (available June 5, 1991) and certainExxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the SEC’s letter to Shearman & Sterling LLP (dated July 2, 1993), we believe the Exchange Notes will be freely transferable by holders other than our affiliates after the exchange offer without further registration under the Securities Act if the holder of the Exchange Notes represents to us in the exchange offer that it is acquiring the Exchange Notes in the ordinary course of its subsidiaries to:business, that it has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes and that it is not our affiliate, as such terms are interpreted by the SEC; provided, however, that broker-dealers (“Participating Broker-Dealers”) receiving Exchange Notes in the exchange offer will have a prospectus delivery requirement with respect to resales of such Exchange Notes. We also believe that Participating Broker-Dealers may fulfill their prospectus delivery requirements with respect to Exchange Notes (other than a resale of an unsold allotment from the sale of the Original Notes) with this prospectus.
We have not entered into any arrangement or understanding with any person who will receive Exchange Notes in the exchange offer to distribute those securities following completion of the exchange offer. We are not aware of any person that will participate in the exchange offer with a view to distribute the Exchange Notes. If you tender your Original Notes in the exchange offer with the intention of participating in any manner in a distribution of the Exchange Notes, you:
cannot rely on such interpretations of the SEC staff set forth in the no-action letters described above; and
must comply with the registration and prospectus delivery requirements of the Securities Act in order to resell Exchange Notes, and be identified as an underwriter in the prospectus.
Unless an exemption from registration is otherwise available, the resale by any security holder intending to distribute Exchange Notes should be covered by an effective registration statement under the Securities Act containing the selling security holder’s information required under the Securities Act. This prospectus may be used for an offer to resell, a resale or other retransfer of Exchange Notes only as specifically described in this prospectus. Each broker-dealer that receives Exchange Notes for its own account in exchange for Original Notes,
where such Original Notes were acquired by such broker-dealer as a result of market-making or other trading activities, must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act (or, to the extent permitted by law, make available a prospectus meeting the requirements of the Securities Act to purchasers) in connection with any resale of such Exchange Notes. See “Plan of Distribution.”
In the registration rights agreement, we agreed that in the event that:
any changes in applicable law or interpretations of the staff of the SEC do not permit us and the guarantors to effect such a registered exchange offer; or
after the filing of the exchange offer registration statement with the SEC, we receive a written request within 20 business days after the consummation of the exchange offer from any noteholder that is prohibited by law or SEC policy from participating in the registered exchange offer, any noteholder who participates in the registered exchange offer but does not receive Exchange Notes that may be sold without Securities Act restrictions on transfer (other than restrictions resulting solely by reason of the status of such noteholder as our affiliate or an affiliate of any guarantor) (subject, in each case, to certain exceptions), or any initial purchasers with respect to the Original Notes that have, or that are reasonably likely to be determined to have, the status of unsold allotments in the original distribution of the Original Notes,
then in all such cases, we and the guarantors will, as soon as practicable but in any event within 60 days of the date of the written request, use our commercially reasonable efforts to (a) file a registration statement (which we refer to as a shelf registration statement) covering resales of the Original Notes or the Exchange Notes, as the case may be, from time to time, (b) cause the shelf registration statement to be declared effective by the SEC under the Securities Act promptly and (c) keep the shelf registration statement effective until the earlier of (X) the date when the Original Notes cease to be registrable securities as defined in the registration rights agreement or (Y) the date that is 210 calendar days following the date that is the earlier of (i) 365 days after May 13, 2021 (or, if such 365th day is not a business day, the next succeeding business day) (such 365th day or, if applicable, next succeeding business day, a “Target Filing Date”) or (ii) the date on which all Original Notes and/or Exchange Notes covered by the shelf registration statement have been sold in the manner set forth and as contemplated in the shelf registration statement. In addition, we agreed to, in the event a shelf registration statement is filed, use our commercially reasonable efforts to provide to each noteholder for which such shelf registration statement was filed, copies of the prospectus which is a part of the shelf registration statement, notify each such noteholder when the shelf registration statement has been declared effective by the SEC and take certain other actions as are required to permit unrestricted resales of the Original Notes or the Exchange Notes, as the case may be. A noteholder selling Original Notes or Exchange Notes pursuant to the shelf registration statement generally would be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to a numbercertain of important limitations and exceptions that are described later in this prospectusthe civil liability provisions under the caption “DescriptionSecurities Act in connection with such sales and will be bound by the provisions of Notes—Certain Covenants.”
Additional Interest
If the exchange offer registration statement is not on file with the SEC on or prior to the Target Filing Date, or, if applicable, the shelf registration statement is required to be filed but is not on file with the SEC on or prior to the Target Filing Date, or if applicable, the shelf registration statement is declared effective but thereafter ceases to be effective or usable and such failure to remain effective or usable exists for more than 120 days (whether or not consecutive) in particular, you should carefully evaluateany 12-month period (in each case subject to certain exceptions), then, upon the specific factors under “Risk Factors”occurrence of any such events, additional interest shall accrue on the principal amount of the Original Notes at a rate of 0.25% per annum for the first 90-day period beginning on page 17and including such date, increasing by an additional 0.25% per annum with respect to any subsequent 90-day period up to a maximum amount of this prospectus and those risk factors incorporated by reference herein.
additional interest of 0.50% in the