UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): June 16, 2006
LEAP WIRELESS INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware
(State or Other Jurisdiction
of Incorporation)
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0-29752
(Commission
File Number)
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33-0811062
(IRS Employer
Identification No.) |
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10307 Pacific Center Court, San Diego, California
(Address of Principal Executive Offices)
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92121
(Zip Code) |
Registrant’s telephone number, including area code: (858) 882-6000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
On June 16, 2006, Leap Wireless International, Inc., or Leap, and its wholly owned subsidiary
Cricket Communications, Inc. (as borrower), or Cricket, entered into an Amended and Restated Credit
Agreement with the lenders named therein and Bank of America, N.A. (as Administrative Agent and L/C
Issuer).
The new facilities under the Amended and Restated Credit Agreement consist of a seven-year $900
million term loan, which was fully drawn at closing, and an undrawn five-year $200 million
revolving credit facility. Under the Amended and Restated Credit Agreement, the term loan bears
interest at the London Interbank Offered Rate (LIBOR) plus 2.75 percent or the bank base rate plus
1.75 percent, as selected by Cricket, with the rate subject to adjustment based on Leap’s corporate
family debt rating. Outstanding borrowings under the term loan must be repaid in 24 quarterly
payments of $2.25 million each, commencing September 30, 2006, followed by four quarterly payments
of $211.5 million each, commencing September 30, 2012. The commitment fee on the revolving credit
facility is payable quarterly at a rate of between 0.50 and 0.25 percent per annum, depending on
Leap’s consolidated senior secured leverage ratio. Borrowings under the revolving credit facility
would currently accrue interest at LIBOR plus 2.75 percent or the bank base rate plus 1.75 percent,
as selected by Cricket, with the rate subject to adjustment based on Leap’s consolidated senior
secured leverage ratio. The new credit facilities are guaranteed by Leap and all of its direct and
indirect domestic subsidiaries other than Cricket, or the Subsidiary Guarantors, and are secured by
substantially all present and future personal property and owned real property of Leap, Cricket and
the Subsidiary Guarantors.
Loan proceeds (net of the $600 million term loan outstanding under Cricket’s credit agreement
immediately prior to the amendment and restatement) are expected to be used by Cricket and its
subsidiaries for the purchase and build-out of wireless licenses,
including licenses that may be purchased from
the Federal Communications Commission, or the FCC, in the “Advanced Wireless Service” Auction of
wireless licenses (also known as Auction No. 66). Loan proceeds will also provide Cricket and its
subsidiaries with funds for ongoing working capital, acquisitions, acquisition-related build-outs,
investments, general corporate purposes and payment of transaction
fees and expenses (including arrangement fees and a syndication fee).
Under the Amended and Restated Credit Agreement, Leap and its subsidiaries are subject to certain
limitations, including limitations on their ability: to incur additional debt or sell assets, with
restrictions on the use of proceeds; to make certain investments and acquisitions (including
investments in designated entities, including for the purposes of participation in the FCC’s
Auction No. 66); to grant liens; and to pay dividends and make certain other restricted payments.
In addition, Leap and its subsidiaries will be required to pay down the facilities under certain
circumstances if they issue debt, sell assets or property, receive certain extraordinary receipts
or generate excess cash flow (as defined in the Amended and Restated Credit Agreement). Leap and
its subsidiaries are also subject to a financial covenant with respect to a maximum consolidated
senior secured leverage ratio and, if a revolving credit loan or uncollateralized letter of credit
is outstanding, with respect to a minimum consolidated interest coverage ratio, a maximum
consolidated leverage ratio and a maximum fixed charge ratio.
Affiliates
of Highland Capital Management, L.P. (a beneficial shareholder of
Leap and an affiliate of James D. Dondero, a director of Leap)
participated in the syndication of the new facilities in amounts
equal to $225 million of the $900 million term loan and $40 million
of the $200 million revolving credit facilities, and received a
syndication fee in connection with their participation.
The Amended and Restated Credit Agreement, and the associated security agreement and guaranties
described above, are being filed with this Current Report on Form 8-K as Exhibits 10.1 through
10.4.
Item 2.03. Creation of a Direct Financial Obligation of a Registrant.
The information set forth in Item 1.01 above is incorporated into this Item 2.03 by reference.