
Note 8.	Long-Term Debt, Financing and Capital Lease Obligations



	Interest Rates			Maturities			March 31, 2012			December 31, 2011
							(in millions)
Notes
Senior notes
Sprint Nextel Corporation	6.00	-	11.50%	2016	-	2022	$	5,500		$	4,500
Sprint Capital Corporation	6.88	-	8.75%	2019	-	2032	6,204			6,204
Serial redeemable senior notes
Nextel Communications, Inc.	5.95	-	7.38%	2013	-	2015	4,780			4,780
Guaranteed notes
Sprint Nextel Corporation	7.00	-	9.00%	2018	-	2020	4,000			3,000
Secured notes
iPCS, Inc.	2.67	-	3.80%	2013	-	2014	481			481
Credit facilities - Sprint Nextel Corporation
Bank credit facility	4.50%			2013			—			—
Export Development Canada	5.49%			2015			500			500
Financing obligation	9.50%			2030			698			698
Capital lease obligations and other	4.11	-	15.49%	2014	-	2022	69			71
Net premiums							36			40
							22,268			20,274
Less current portion							(8		)	(8		)
Long-term debt, financing and capital lease obligations							$	22,260		$	20,266

As of March 31, 2012, Sprint Nextel Corporation, the parent corporation, had $10.0 billion in principal of debt outstanding, including amounts drawn under the credit facilities. In addition, $11.5 billion in principal of our long-term debt issued by wholly-owned subsidiaries is guaranteed by the parent, of which approximately $6.7 billion is fully and unconditionally guaranteed. The indentures and financing arrangements governing certain subsidiaries' debt contain provisions that limit cash dividend payments on subsidiary common stock. The transfer of cash in the form of advances from the subsidiaries to the parent corporation generally is not restricted. Cash interest payments, net of amounts capitalized of $115 million and $99 million, totaled $179 million and $341 million during the three-month periods ended March 31, 2012 and 2011, respectively.

Notes

Notes consist of senior notes, serial redeemable senior notes, and guaranteed notes, all of which are unsecured, as well as secured notes of iPCS, Inc. (iPCS), which are secured solely with the underlying assets of iPCS. Cash interest on all of the notes is generally payable semi-annually in arrears. As of March 31, 2012, approximately $20.8 billion of the notes were redeemable at the Company's discretion at the then-applicable redemption prices plus accrued interest.

Approximately $7.3 billion of our senior notes and guaranteed notes provide holders with the right to require us to repurchase the notes if a change-of-control triggering event (as defined in our indentures governing applicable notes) occurs. If we are required to make a change-of-control offer, we will offer cash payment equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest.

On March 1, 2012, the Company issued $1.0 billion aggregate principal amount of 9.125% notes due 2017 and $1.0 billion aggregate principal amount of 7.00% guaranteed notes due 2020. Interest is payable semi-annually on March 1 and September 1. The Company, at its option, may redeem some or all of either series of the notes at any time prior to maturity. The 2020 guaranteed notes are guaranteed by the Company's subsidiaries that guarantee its existing credit facilities.

Credit Facilities

As of March 31, 2012, $1.0 billion in letters of credit were outstanding under our $2.2 billion revolving bank credit facility, including the letter of credit required by the 2004 FCC Report and Order to reconfigure the 800 MHz band (the "Report and Order"). As a result, the Company had $1.2 billion of borrowing capacity available under this revolving bank credit facility as of March 31, 2012. The terms of this credit facility provide for an interest rate equal to the London Interbank Offered Rate (LIBOR) plus a spread that varies depending on the Company's credit ratings. The Company's unsecured loan agreement with Export Development Canada (EDC) has terms similar to those of the revolving bank credit facility, except that under the terms of the EDC loan, repayments of outstanding amounts cannot be re-drawn. As of March 31, 2012, the EDC loan was fully drawn.

Financing, Capital Lease and Other Obligations

We have approximately 3,000 cell sites that we sold and subsequently leased back. Terms extend through 2021, with renewal options for an additional 20 years. These cell sites continue to be reported as part of our property, plant and equipment due to our continued involvement with the property sold and the transaction is accounted for as a financing. Our capital lease and other obligations are primarily for the use of communication switches.

Covenants

As of March 31, 2012, the Company was in compliance with all restrictive and financial covenants associated with its borrowings. A default under any of our borrowings could trigger defaults under our other debt obligations, which in turn could result in the maturities being accelerated. Certain indentures that govern our outstanding notes require compliance with various covenants, including covenants that limit the Company's ability to sell all or substantially all of its assets, covenants that limit the ability of the Company and its subsidiaries to incur indebtedness, and covenants that limit the ability of the Company and its subsidiaries to incur liens, as defined by the terms of the indentures.

We are currently restricted from paying cash dividends because our ratio of total indebtedness to trailing four quarters earnings before interest, taxes, depreciation and amortization and certain other non-recurring items, as defined in the credit facility (adjusted EBITDA), exceeds 2.5 to 1.0. The Company is also obligated to repay the credit facilities if certain change-of-control events occur.