Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Leap Wireless International (LWIN) -- Ignore unavailable to you. Want to Upgrade?

To: Pierre who wrote (1819)	3/28/2002 10:00:23 PM
From: Jon Koplik	Respond to of 2737

WSJ -- Leap Amends Vendor Financing Agreements to Change Covenants March 28, 2002 Leap Amends Vendor Financing Agreements to Change Covenants DOW JONES NEWSWIRES SAN DIEGO -- Leap Wireless International Inc.'s (LWIN) Cricket Communications Inc. unit amended its vendor financing agreements with L.M. Ericsson Telephone Co. (ERICY), Lucent Technologies Inc. (LU) and Nortel Networks Corp. (NT). In a press release Thursday, wireless communications carrier Leap Wireless said the amendments delay the effect of the consolidated EBITDA-to-cash interest expense covenant so that it is now first measured at March 31, 2003. The amendments also limit the measurement of the total debt-to-annualized EBITDA covenant to the last day of each fiscal quarter and now require a ratio of total debt to annualized EBITDA no greater than 10 to 1 on the covenant's first measurement date of June 30, 2003. Finally, the amendments increase the maximum capital expenditures that Cricket is allowed to make this year by $60 million. The EBITDA covenants, as amended, generally measure consolidated performance of Cricket Communication, its units and the units of Leap Wireless formed to hold wireless licenses used in Cricket's business. Cricket agreed to a new minimum consolidated covenant for EBITDA, or earnings before interest, taxes, depreciation and amortization. This covenant requires EBITDA of no less than negative $27 million at the end of the second quarter; zero dollars at the end of the third quarter; positive $9 million at the end of the fourth quarter; and $45 million at the end of the first fiscal quarter of 2003. Leap Wireless said that under the current business plan, it expects to meet the vendor loan covenants through the end of 2003. Leap Wireless said it will need to refinance, or amend its vendor facilities, or raise additional capital before January 2004 to meet its debt-to-equity covenant. Leap also agreed to pledge as collateral substantially all of its wireless operating licenses that haven't been pledged as security. Leap planned to invest about $171 million in its Cricket business over the next 18 months, allowing the unit to meet its debt-to-equity covenant as of Dec. 31 and meet its payment obligations to the Federal Communications Commission in 2002 and 2003 from current resources. Under the amendments, Leap agreed to set aside, or invest in Cricket and units $111 million currently and about $60 million additional as Leap raises cash in the future. On Wednesday, the FCC said it will return about $60 million of the $70 million the company currently has on deposit with the commission. Under the amendments, $25 million can be retained by Leap for general corporate purposes and the balance of $35 million will be invested in Cricket. Cricket also amended its equipment purchase agreement with Nortel. Nortel agreed to accept purchase orders from Cricket of up to a total of $234 million. Nortel may in its discretion, accept, or reject purchase orders that are more than this amount. Information regarding the amendments with Ericsson and Lucent wasn't immediately available. Shares of Leap Wireless closed Thursday at $8.42, up 8 cents, or 1%, on Nasdaq volume of 1.3 million shares. Average daily volume is 1.8 million shares. -Yun-Hee Kim; Dow Jones Newswires; 201-938-5400 Updated March 28, 2002 6:48 p.m. EST Copyright © 2002 Dow Jones & Company, Inc. All Rights Reserved