Announces it has obtained commitments for a new $1.5 bln revolving bank credit facility, which will replace an existing $2 bln facility that would have expired in Aug 2003; co has no plans to draw against the new facility. Also, Sprint has reduced its outstanding commercial paper from peak levels of nearly $4 bln to zero today, and the co continues to expect to be free cash flow break-even for 2002.
To recap, Sprint allowed(or is allowing) a $3B revolving credit facility to expire this month, August 2002. They are replacing an existing $2B credit line set to expire in August 2003 with this $1.5B line. They have also reduced CP borrowings to nada.
They followed with this view of the future.
biz.yahoo.com
Sprint Obtains Bank Commitments for $1.5 Billion Unsecured Credit Line; Anticipates Significant Debt Reductions Beginning in 2003
OVERLAND PARK, Kan., July 30 /PRNewswire-FirstCall/ -- Sprint (NYSE: FON - News, PCS - News) today announced it has obtained commitments for a new $1.5 billion revolving bank credit facility. The facility is unsecured, with no springing liens, and is structured as a 364-day credit line with a subsequent one-year term-out option. Co-lead banks are Citibank and JPMorgan Chase. The new facility is in the final documentation stages and is expected to close within the next few weeks.
(Photo: newscom.com )
This new facility will replace an existing $2 billion facility that would have expired in August 2003. Sprint has no plans to draw against the new facility.
Sprint has reduced its outstanding commercial paper from peak levels of nearly $4 billion earlier this year to zero today. In addition, Sprint expects continued improvements in operating cash flows and has multiple sources of liquidity. As a result, the company believes the new facility provides ample capacity.
Sprint continues to expect to be free cash flow break-even for the full- year 2002. Even assuming a continuing slow-growth economy, Sprint believes it has sufficient flexibility to manage costs and capital expenditures to produce total free cash flow in 2003 of more than $1 billion. This free cash flow is expected to be used to retire maturing debt obligations that total $1.4 billion in 2003. In 2004, Sprint expects free cash flow to significantly exceed its maturing debt obligations of $1.2 billion. Thus, Sprint anticipates significantly declining debt balances in future years with minimal, if any, external financing required.
Today's announcement complements Sprint's strong liquidity. Excluding bank lines, Sprint had sources of liquidity totaling approximately $1.85 billion as of the end of June, far in excess of foreseeable cash requirements.
In addition, Sprint could substantially augment liquidity if it decided to sell its Directory Publishing business. The company believes that such a sale could yield in excess of $2 billion after taxes. As previously noted, the company expects to receive final offers over the next couple of weeks and make a decision around the end of August.
Sprint is currently working with its lenders to remove the ratings triggers from the company's Global Markets accounts receivables asset securitization facility. The absence of ratings triggers would be consistent with the recently-executed PCS accounts receivables asset securitization facility. This process is expected to be completed in the next few weeks. |
