Clearwire Corporation (NASDAQ: CLWR) today announced that its operating subsidiary Clearwire Communications LLC (“Clearwire Communications”) has priced an offering of $175,000,000 aggregate principal amount 12% first-priority senior secured notes due 2015 at an issue price of 105.182% plus accrued interest from December 1, 2010 (the “First Lien Notes”) and $500,000,000 aggregate principal amount 12% second-priority secured notes due 2017 at an issue price of 100.0% plus accrued interest from December 9, 2010 (the “Second Lien Notes”) and an offering of $650,000,000 aggregate principal amount 8.25% exchangeable notes due 2040 at an issue price of 100.0% plus accrued interest from December 8, 2010 (the “Exchangeable Notes” and collectively with the First Lien Notes and the Second Lien Notes, the “Notes”). The offering of Exchangeable Notes is up from the $500,000,000 proposed offering size for the Exchangeable Notes announced on December 1, 2010. Clearwire Communications has granted the initial purchasers of the Exchangeable Notes an option for 30 days to purchase up to an additional $100.0 million of Exchangeable Notes. The initial exchange rate for the Exchangeable Notes is 141.2429 shares of Class A Common Stock of Clearwire Corporation (the “Company”) per $1,000 principal amount of the Exchangeable Notes equivalent to an initial exchange price of approximately $7.08 per share of the Company’s Class A Common Stock (the “Class A Common Stock”). Upon exchange, Clearwire Communications may deliver either shares of Class A Common Stock or cash based upon a daily settlement value calculated on a proportionate basis for each day of a 25 trading-day observation period. Certain stockholders of the Company that hold equity securities representing approximately 85% of the Company’s voting power have pre-emptive rights for 30 days from the date of the offering memorandum for the Exchangeable Notes that entitle such stockholders to purchase their pro rata share (based upon voting power) of all Exchangeable Notes issued. The Company has received waivers from stockholders holding approximately 31% of the voting power. The remaining pre-emptive rights, if exercised, could result in Clearwire Communications issuing up to an additional approximately $760.0 million in Exchangeable Notes (assuming no exercise of the initial purchasers’ over-allotment option). The Company is not aware whether all or any of these rights will be exercised.
The Second Lien Notes will be contractually subordinated in right of payment to the First Lien Notes and Clearwire Communications’ first-priority secured notes. The First Lien Notes and the Second Lien Notes will be unconditionally guaranteed on a senior basis by certain of Clearwire Communications’ domestic subsidiaries. The First Lien Notes, the Second Lien Notes and the related guarantees will be secured by first-priority or second-priority liens, as applicable, on substantially all of Clearwire Communications’ and the guarantors’ assets. The Exchangeable Notes will be unsecured obligations of the issuers and the guarantors.