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Sprint Nextel Corp. (S), the third- largest U.S. mobile-phone service provider, replaced a $2.2 billion revolving line of credit that expires in October with a larger pact.
JPMorgan Chase & Co. and Citigroup Inc. arranged the new deal, which matures in February 2018 and expands its borrowing capacity by $600 million, the company said today in a regulatory filing. Proceeds will be used for general corporate purposes, Sprint Nextel said.
Under terms of the credit pact, the Overland Park, Kansas- based company’s debt to earnings must not exceed 6.25 times through June 30, 2014, stepping down gradually to 4 times for the fiscal quarter ended Dec. 31, 2016, and remaining at that level for its duration, according to the filing.
Verizon Wireless and AT&T Inc. (T) are the two largest U.S. mobile-phone service providers.
In a revolving line of credit, money may be borrowed again once it’s repaid; in a term loan it can’t.
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