v3.22.0.1
Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt
Note 8 – Debt

Debt was as follows:
(in millions)December 31,
2021		December 31,
2020
3.360% Series 2016-1 A-1 Notes due 2021
$— $656 
7.250% Senior Notes due 2021
— 2,250 
11.500% Senior Notes due 2021
— 1,000 
4.000% Senior Notes to affiliates due 2022
1,000 1,000 
4.000% Senior Notes due 2022
500 500 
5.375% Senior Notes to affiliates due 2022
1,250 1,250 
6.000% Senior Notes due 2022
2,280 2,280 
6.000% Senior Notes due 2023
— 1,300 
7.875% Senior Notes due 2023
4,250 4,250 
6.000% Senior Notes due 2024
— 1,000 
7.125% Senior Notes due 2024
2,500 2,500 
3.500% Senior Secured Notes due 2025
3,000 3,000 
4.738% Series 2018-1 A-1 Notes due 2025
1,706 2,100 
5.125% Senior Notes due 2025
— 500 
7.625% Senior Notes due 2025
1,500 1,500 
1.500% Senior Secured Notes due 2026
1,000 1,000 
2.250% Senior Notes due 2026
1,800 — 
2.625% Senior Notes due 2026
1,200 — 
6.500% Senior Notes due 2026
— 2,000 
4.500% Senior Notes due 2026
— 1,000 
4.500% Senior Notes to affiliates due 2026
— 1,000 
7.625% Senior Notes due 2026
1,500 1,500 
3.750% Senior Secured Notes due 2027
4,000 4,000 
5.375% Senior Notes due 2027
500 500 
2.050% Senior Secured Notes due 2028
1,750 1,750 
4.750% Senior Notes due 2028
1,500 1,500 
4.750% Senior Notes to affiliates due 2028
1,500 1,500 
5.152% Series 2018-1 A-2 Notes due 2028
1,838 1,838 
6.875% Senior Notes due 2028
2,475 2,475 
2.400% Senior Secured Notes due 2029
500 — 
2.625% Senior Notes due 2029
1,000 — 
3.375% Senior Notes due 2029
2,350 — 
3.875% Senior Secured Notes due 2030
7,000 7,000 
2.250% Senior Secured Notes due 2031
1,000 1,000 
2.550% Senior Secured Notes due 2031
2,500 2,500 
2.875% Senior Notes due 2031
1,000 — 
3.500% Senior Notes due 2031
2,450 — 
2.700% Senior Secured Notes due 2032
1,000 — 
8.750% Senior Notes due 2032
2,000 2,000 
4.375% Senior Secured Notes due 2040
2,000 2,000 
3.000% Senior Secured Notes due 2041
2,500 2,500 
4.500% Senior Secured Notes due 2050
3,000 3,000 
3.300% Senior Secured Notes due 2051
3,000 3,000 
3.400% Senior Secured Notes due 2052
2,800 — 
3.600% Senior Secured Notes due 2060
1,700 1,000 
Other debt47 240 
Unamortized premium on debt to third parties1,740 2,197 
Unamortized discount on debt to affiliates(5)(20)
Unamortized discount on debt to third parties(200)(197)
Debt issuance costs and consent fees(238)(244)
Total debt74,193 71,125 
Less: Current portion of Senior Notes to affiliates2,245 — 
Less: Current portion of Senior Notes and other debt to third parties3,378 4,579 
Total long-term debt$68,570 $66,546 
Classified on the consolidated balance sheets as:
Long-term debt$67,076 $61,830 
Long-term debt to affiliates1,494 4,716 
Total long-term debt$68,570 $66,546 
Our effective interest rate, excluding the impact of derivatives and capitalized interest, was approximately 4.1% and 4.6% for the years ended December 31, 2021 and 2020, respectively, on weighted-average debt outstanding of $74.0 billion and $58.4 billion for the years ended December 31, 2021 and 2020, respectively. The weighted-average debt outstanding was calculated by applying an average of the monthly ending balances of total short-term and long-term debt and short-term and long-term debt to affiliates, net of unamortized premiums, discounts, debt issuance costs and consent fees.

Issuances and Borrowings

During the year ended December 31, 2021, we issued the following Senior Notes and Senior Secured Notes:
(in millions)Principal IssuancesPremiums/Discounts and Issuance CostsNet Proceeds from Issuance of Long-Term DebtIssue Date
2.250% Senior Notes due 2026
$1,000 $(7)$993 January 14, 2021
2.625% Senior Notes due 2029
1,000 (7)993 January 14, 2021
2.875% Senior Notes due 2031
1,000 (6)994 January 14, 2021
2.625% Senior Notes due 2026
1,200 (7)1,193 March 23, 2021
3.375% Senior Notes due 2029
1,250 (7)1,243 March 23, 2021
3.500% Senior Notes due 2031
1,350 (8)1,342 March 23, 2021
2.250% Senior Notes due 2026
800 (2)798 May 13, 2021
3.375% Senior Notes due 2029
1,100 6 1,106 May 13, 2021
3.500% Senior Notes due 2031
1,100 6 1,106 May 13, 2021
Total of Senior Notes issued$9,800 $(32)$9,768 
3.400% Senior Secured Notes due 2052
$1,300 $(11)$1,289 August 13, 2021
3.600% Senior Secured Notes due 2060
700 1 701 August 13, 2021
2.400% Senior Secured Notes due 2029
500 (2)498 December 6, 2021
2.700% Senior Secured Notes due 2032
1,000 (8)992 December 6, 2021
3.400% Senior Secured Notes due 2052
1,500 (21)1,479 December 6, 2021
Total of Senior Secured Notes issued$5,000 $(41)$4,959 

Credit Facilities

T-Mobile USA and certain of its affiliates, as guarantors, have a credit agreement (the “Credit Agreement”) with certain financial institutions named therein that provides for, among other things, a $5.5 billion revolving credit facility (“Revolving Credit Facility”). Borrowings under the Revolving Credit Facility will bear interest at a rate equal to a per annum rate of LIBOR plus a margin of 1.25% with the margin subject to a reduction to 1.00% if T-Mobile’s Total First Lien Net Leverage Ratio (as defined in the Credit Agreement) is less than or equal to 0.75 to 1.00. The commitments under the Revolving Credit Facility mature on April 1, 2025. The Credit Agreement contains customary representations, warranties and covenants, including a financial maintenance covenant of 3.3x with respect to T-Mobile’s Total First Lien Net Leverage Ratio commencing with the period ending September 30, 2020. As of December 31, 2021, we did not have an outstanding balance under this facility.

On October 30, 2020, we entered into a $5.0 billion senior secured term loan commitment with certain financial institutions. On January 14, 2021, we issued an aggregate of $3.0 billion of Senior Notes. A portion of the senior secured term loan commitment was reduced by an amount equal to the aggregate gross proceeds of the Senior Notes, which reduced the commitment to $2.0 billion. On March 23, 2021, we issued an aggregate of $3.8 billion of Senior Notes. The senior secured term loan commitment was terminated upon the issuance of the $3.8 billion of Senior Notes.

Senior Secured Notes

On August 13, 2021, T-Mobile USA and certain of its affiliates, as guarantors, issued an aggregate $2.0 billion of Senior Secured Notes bearing interest at 3.400% and 3.600%, respectively, and maturing in 2052 and 2060, respectively. We used the net proceeds of $2.0 billion, together with cash on hand, to redeem our 4.500% Senior Notes due 2026 held by DT and our 4.500% Senior Notes due 2026 held by public investors.
On December 6, 2021, T-Mobile USA and certain of its affiliates, as guarantors, issued an aggregate of $3.0 billion of Senior Secured Notes bearing interest rates ranging from 2.400% to 3.400% and maturing in 2029 through 2052, and used the net proceeds of such issuances for general corporate purposes, which may include among other things, financing acquisitions of additional spectrum and refinancing existing indebtedness on an ongoing basis.

The Senior Secured Notes issued in 2021 have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons except in accordance with an applicable exemption from the registration requirements thereof. Accordingly, the Senior Secured Notes were offered and sold only (1) to persons reasonably believed to be “qualified institutional buyers” under Rule 144A under the Securities Act and (2) outside the United States to non-U.S. persons in reliance upon Regulation S under the Securities Act.

The Senior Secured Notes are secured by a first priority security interest, subject to permitted liens, in substantially all of our present and future assets, other than certain excluded assets. They are redeemable at our discretion, in whole or in part, at any time. If redeemed prior to their contractually specified par call date, the redemption price is subject to a make-whole premium calculated by reference to then-current U.S. Treasury rates plus a fixed spread; if redeemed on or after their respective par call date, the make-whole premium does not apply. The amount of time by which the par call date precedes the maturity date of the respective series of Senior Secured Notes varies from one to six months.

We have entered into Registration Rights Agreements that are in effect through the maturity of the applicable Senior Secured Notes issued in 2021. These agreements call for us to use commercially reasonable efforts to file a registration statement and have it declared effective within a particular time period and to maintain the effectiveness of the registration statement for a certain period of time. If a default occurs, we will pay additional interest up to a maximum increase of 0.50% per annum. We have not accrued any obligations associated with the Registration Rights Agreements as compliance with the agreements is considered probable.

In 2021, we exchanged the Senior Secured Notes issued in 2020, which were not registered under the Securities Act, for substantially identical Senior Secured Notes that were registered under the Securities Act.

Senior Notes

On January 14, 2021, T-Mobile USA and certain of its affiliates, as guarantors, issued an aggregate of $3.0 billion of Senior Notes bearing interest ranging from 2.250% to 2.875% and maturing in 2026 through 2031, and used the net proceeds of $3.0 billion for general corporate purposes, including among other things, the acquisition of additional spectrum and the refinancing of existing indebtedness subsequent to issuance.

On March 23, 2021, T-Mobile USA and certain of its affiliates, as guarantors, issued an aggregate of $3.8 billion of Senior Notes bearing interest ranging from 2.625% to 3.500% and maturing in 2026 through 2031, and used the net proceeds of $3.8 billion to acquire spectrum licenses pursuant to the Federal Communications Commission’s C-Band spectrum Auction 107, with the remainder used, together with cash on hand, to redeem T-Mobile USA’s 6.500% Senior Notes due 2026.

On May 13, 2021, T-Mobile USA and certain of its affiliates, as guarantors, issued an aggregate of $3.0 billion of Senior Notes bearing interest ranging from 2.250% to 3.500% and maturing in 2026 through 2031, and used the net proceeds of $3.0 billion to redeem our 6.000% Senior Notes due 2023, 6.000% Senior Notes due 2024, and 5.125% Senior Notes due 2025 with the remainder used to refinance existing indebtedness subsequent to issuance.

The Senior Notes issued in May 2021 have not been registered under the Securities Act and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons except in accordance with an applicable exception from the registration requirements thereof. Accordingly, the Senior Notes issued in May 2021 were offered and sold only (1) to persons reasonably believed to be “qualified institutional buyers” under Rule 144A under the Securities Act and (2) outside the United States to non-U.S. persons in reliance upon Regulation S under the Securities Act.

The Senior Notes are guaranteed on a senior unsecured basis by the Company and certain of our consolidated subsidiaries. They are redeemable at our discretion, in whole or in part, at any time. If redeemed prior to their contractually specified applicable premium end date, the redemption price is subject to a premium calculated by reference to then-current U.S. Treasury rates plus a fixed spread; if redeemed on or after their respective applicable premium end date, they are redeemable at a contractually specified fixed premium that steps down gradually as the Senior Notes approach their par call date, on or after which they are redeemable at par. The amount of time by which the par call date precedes the maturity date of the respective series of Senior Notes varies from one to three years.
We have entered into a Registration Rights Agreement that is in effect through the maturity of the Senior Notes issued in May 2021. This agreement calls for us to use commercially reasonable efforts to file a registration statement and have it declared effective within a particular time period and to maintain the effectiveness of the registration statement for a certain period of time. If a default occurs, we will pay additional interest up to a maximum increase of 0.50% per annum. We have not accrued any obligations associated with the Registration Rights Agreement as compliance with the agreements is considered probable.

Debt Assumed

In connection with the Merger, we assumed the following indebtedness of Sprint:
(in millions)Fair value as of April 1, 2020Principal Outstanding as of December 31, 2021Carrying Value as of December 31, 2021
7.250% Senior Notes due 2021
$2,324 $— $— 
7.875% Senior Notes due 2023
4,682 4,250 4,472 
7.125% Senior Notes due 2024
2,746 2,500 2,650 
7.625% Senior Notes due 2025
1,677 1,500 1,618 
7.625% Senior Notes due 2026
1,701 1,500 1,648 
3.360% Senior Secured Series 2016-1 A-1 Notes due 2021 (1)
1,310 — — 
4.738% Senior Secured Series 2018-1 A-1 Notes due 2025 (1)
2,153 1,706 1,735 
5.152% Senior Secured Series 2018-1 A-2 Notes due 2028 (1)
1,960 1,838 1,936 
7.000% Senior Notes due 2020
1,510 — — 
11.500% Senior Notes due 2021
1,105 — — 
6.000% Senior Notes due 2022
2,372 2,280 2,312 
6.875% Senior Notes due 2028
2,834 2,475 2,772 
8.750% Senior Notes due 2032
2,649 2,000 2,577 
Accounts receivable facility2,310 — — 
Other debt464 — — 
Total Debt Assumed$31,797 $20,049 $21,720 
(1)In connection with the closing of the Merger, we assumed Sprint’s spectrum-backed notes, which are collateralized by the acquired directly held and third-party leased Spectrum licenses. See “Spectrum Financing” section below for further information.
Note Redemptions and Repayments

During the year ended December 31, 2021, we made the following note redemptions and repayments:
(in millions)Principal Amount
Write-off of Issuance Cost and Consent Fees (1)
Redemption Premium (2)
Redemption DateRedemption Price
6.500% Senior Notes due 2026
$2,000 $36 $65 March 27, 2021103.250 %
6.000% Senior Notes due 2023
1,300 10 — May 23, 2021100.000 %
6.000% Senior Notes due 2024
1,000 9 — May 23, 2021100.000 %
5.125% Senior Notes due 2025
500 3 6 May 23, 2021101.281 %
4.500% Senior Notes due 2026
1,000 5 23 August 23, 2021102.250 %
7.250% Senior Notes due 2021
2,250 — — September 15, 2021N/A
11.500% Senior Notes due 2021
1,000 — — November 15, 2021N/A
Total Senior Notes to third parties redeemed$9,050 $63 $94 
4.500% Senior Notes to affiliates due 2026
$1,000 $4 $22 August 23, 2021102.250 %
Total Senior Notes to affiliates redeemed$1,000 $4 $22 
3.360% Secured Series 2016-1 A-1 Notes due 2021
$656 $— $— August 20, 2021N/A
4.738% Secured Series 2018-1 A-1 Notes due 2025
394 — — VariousN/A
Other debt184 — — VariousN/A
Total spectrum financing and other debt repayments$1,234 $— $— 
(1)Write-off of issuance costs and consent fees are included in Other expense, net on our Consolidated Statements of Comprehensive Income. Write-off of issuance costs and consent fees are included in Loss on redemption of debt within Net cash provided by operating activities on our Consolidated Statements of Cash Flows.
(2)The redemption premium is the excess paid over the principal amount. Redemption premiums are included in Other expense, net on our Consolidated Statements of Comprehensive Income and in Net cash used in financing activities on our Consolidated Statements of Cash Flows.

Our losses on extinguishment of debt were $184 million, $371 million, and $19 million for the years ended December 31, 2021, 2020 and 2019, respectively, and are included in Other expense, net on our Consolidated Statements of Comprehensive Income.

Spectrum Financing

On April 1, 2020, in connection with the closing of the Merger, we assumed Sprint’s spectrum-backed notes, which are collateralized by the acquired directly held and third-party leased Spectrum licenses (collectively, the “Spectrum Portfolio”) transferred to wholly-owned bankruptcy-remote special purpose entities (collectively, the “Spectrum Financing SPEs”). As of December 31, 2021 and 2020, the total outstanding obligations under these Notes was $3.5 billion and $4.6 billion, respectively.

In October 2016, certain subsidiaries of Sprint Communications, Inc. transferred the Spectrum Portfolio to the Spectrum Financing SPEs, which was used as collateral to raise an initial $3.5 billion in senior secured notes (the “2016 Spectrum-Backed Notes”) bearing interest at 3.360% per annum under a $7.0 billion securitization program. The 2016 Spectrum-Backed Notes were repayable over a five-year term, with interest-only payments over the first four quarters and amortizing quarterly principal payments thereafter commencing December 2017 through September 2021. We fully repaid the 2016 Spectrum-Backed Notes in 2021.

In March 2018, Sprint issued approximately $3.9 billion in aggregate principal amount of senior secured notes (the “2018 Spectrum-Backed Notes” and together with the 2016 Spectrum-Backed Notes, the “Spectrum-Backed Notes”) under the existing $7.0 billion securitization program, consisting of two series of senior secured notes. The first series of notes totaled $2.1 billion in aggregate principal amount, bears interest at 4.738% per annum, and has quarterly interest-only payments until June 2021, and amortizing quarterly principal amounts thereafter commencing in June 2021 through March 2025. As of December 31, 2021, $525 million of the aggregate principal amount was classified as Short-term debt on our Consolidated Balance Sheets. The second series of notes totaled approximately $1.8 billion in aggregate principal amount, bears interest at 5.152% per annum, and has quarterly interest-only payments until June 2023, and amortizing quarterly principal amounts
thereafter commencing in June 2023 through March 2028. The Spectrum Portfolio, which also serves as collateral for the Spectrum-Backed Notes, remains substantially identical to the original portfolio from October 2016.

Simultaneously with the October 2016 offering, Sprint Communications, Inc. entered a long-term lease with the Spectrum Financing SPEs for the ongoing use of the Spectrum Portfolio. Sprint Communications, Inc. is required to make monthly lease payments to the Spectrum Financing SPEs in an aggregate amount that is market-based relative to the spectrum usage rights as of the closing date and equal to $165 million per month. The lease payments, which are guaranteed by T-Mobile subsidiaries subsequent to the Merger, are sufficient to service all outstanding series of the 2016 Spectrum-Backed Notes and the lease also constitutes collateral for the senior secured notes. Because the Spectrum Financing SPEs are wholly-owned T-Mobile subsidiaries subsequent to the Merger, these entities are consolidated and all intercompany activity has been eliminated.

Each Spectrum Financing SPE is a separate legal entity with its own separate creditors who will be entitled, prior to and upon the liquidation of the respective Spectrum Financing SPE, to be satisfied out of the Spectrum Financing SPE’s assets prior to any assets of such Spectrum Financing SPE becoming available to T-Mobile. Accordingly, the assets of each Spectrum Financing SPE are not available to satisfy the debts and other obligations owed to other creditors of T-Mobile until the obligations of such Spectrum Financing SPE under the spectrum-backed senior secured notes are paid in full. Certain provisions of the Spectrum Financing facility require us to maintain specified cash collateral balances. Amounts associated with these balances are considered to be restricted cash.

Restricted Cash

Certain provisions of our debt agreements require us to maintain specified cash collateral balances. Amounts associated with these balances are considered to be restricted cash.

Standby Letters of Credit

For the purposes of securing our obligations to provide device insurance services and for the purposes of securing our general purpose obligations, we maintain an agreement for standby letters of credit with certain financial institutions. We assumed certain of Sprint’s standby letters of credit in the Merger. Our outstanding standby letters of credit were $441 million and $555 million as of December 31, 2021 and 2020, respectively.