Note 8 – Debt

Debt was as follows:



(in millions)	December 31, 2015			December 31, 2014
5.250% Senior Notes due 2018	$	500		$	500
6.288% Senior Reset Notes to affiliates due 2019	1,250			1,250
6.464% Senior Notes due 2019	1,250			1,250
6.366% Senior Reset Notes to affiliates due 2020	1,250			1,250
6.542% Senior Notes due 2020	1,250			1,250
6.625% Senior Notes due 2020	1,000			1,000
6.250% Senior Notes due 2021	1,750			1,750
6.633% Senior Notes due 2021	1,250			1,250
8.097% Senior Reset Notes to affiliates due 2021	1,250			1,250
6.125% Senior Notes due 2022	1,000			1,000
6.731% Senior Notes due 2022	1,250			1,250
8.195% Senior Reset Notes to affiliates due 2022	1,250			1,250
5.950% Senior Reset Notes to affiliates due 2023 (reset date in April 2016)	600			600
6.000% Senior Notes due 2023	1,300			1,300
6.625% Senior Notes due 2023	1,750			1,750
6.836% Senior Notes due 2023	600			600
6.500% Senior Notes due 2024	1,000			1,000
6.375% Senior Notes due 2025	1,700			1,700
6.500% Senior Notes due 2026	2,000			—
Senior Secured Term Loans	2,000			—
Unamortized premium from purchase price allocation fair value adjustment	250			286
Unamortized discount on Senior Secured Term Loans	(10		)	—
Capital leases	826			410
Financing arrangements	—			64
Total debt	26,266			21,960
Less: Current portion of Senior Secured Term Loans	20			—
Less: Current portion of capital leases	162			23
Less: Financing arrangements	—			64
Total long-term debt	$	26,084		$	21,873

Classified on the balance sheet as:
Long-term debt	$	20,484		$	16,273
Long-term debt to affiliates	5,600			5,600
Total long-term debt	$	26,084		$	21,873

Long-term Debt

In 2015, T-Mobile USA issued $2.0 billion of 6.500% Senior Notes due 2026, for which T-Mobile and certain subsidiaries are guarantors. In 2015, T-Mobile USA entered into a Term Loan Credit Agreement, which provides for a seven-year senior secured term loan facility with the right to request incremental term loans, subject to the conditions set forth in the agreement. In connection with this agreement, T-Mobile incurred $2.0 billion of Senior Secured Term Loans pursuant to the Term Loan Credit Agreement, for which certain subsidiaries are guarantors. T-Mobile USA’s obligations under the agreement are secured by a first priority lien on substantially all of T-Mobile USA’s assets and the assets of T-Mobile USA’s subsidiaries that are guarantors, subject to certain exceptions. In addition, the Senior Secured Term Loans are subject to a first priority pledge of the equity interests held by T-Mobile USA and substantially all of its direct and indirect subsidiaries. See Note 15 – Guarantor Financial Information for further information regarding the condensed consolidating financial information of T-Mobile’s guarantor subsidiaries.

Interest on the Senior Notes to third parties is accrued from the date of issuance at stated interest rates and paid semi-annually. Interest on the Senior Secured Term Loans is accrued from the date of issuance equal to London Interbank Offered Rate (“LIBOR”) plus a margin rate of 2.750% and is paid quarterly. The Senior Secured Term Loans had an effective interest rate of 3.500% as of December 31, 2015. Principal on the Senior Secured Term Loans is paid quarterly equal to 0.250% of the principal amount with the remaining balance of the principal due on the final maturity date in November 2022. The interest rate on the 5.950% Senior Reset Notes to affiliates due 2023 will adjust at the reset date to a rate defined in the applicable supplemental indenture. The long-term debt may be redeemed or prepaid, as applicable, in whole or from time to time in part, at specified redemption prices or prepayment premiums, as applicable. The long-term debt may also be redeemed by the Company using make-whole call or breakage provisions or in part with equity proceeds. All redemptions are subject to the conditions set forth in the applicable supplemental indenture or Term Loan Credit Agreement.

In 2015, the interest rate on certain Senior Reset Notes to affiliates were adjusted as follows:



	December 31, 2015
	Current Rate		Previous Rate
6.288% Senior Reset Notes to affiliates due 2019	6.288	%	5.578	%
6.366% Senior Reset Notes to affiliates due 2020	6.366	%	5.656	%
8.097% Senior Reset Notes to affiliates due 2021	8.097	%	5.747	%
8.195% Senior Reset Notes to affiliates due 2022	8.195	%	5.845	%

Capital Leases

Capital lease agreements relate to network equipment with varying expiration terms through 2030. Future minimum payments required under capital leases, including interest, over their remaining terms as of December 31, 2015 are expected to be $199 million for the year ending 2016, $189 million in 2017, $158 million in 2018, $128 million in 2019, $56 million in 2020, and $267 million thereafter, for a total of $997 million, including $171 million in interest.

Financing Arrangements

T-Mobile maintains a handset financing arrangement with Deutsche Bank AG (“Deutsche Bank”), which allows for up to $108 million in borrowings. Under the handset financing arrangement, the Company can effectively extend payment terms for invoices payable to certain handset vendors. The interest rate on the handset financing arrangement is determined based on LIBOR plus a specified margin per the arrangement. Obligations under the handset financing arrangement are included in Short-term debt. In 2015 and 2014, T-Mobile utilized and repaid $100 million under the financing arrangement. As of December 31, 2015 and 2014, there was no outstanding balance.

The Company maintains vendor financing arrangements with its primary network equipment suppliers. Under the respective agreements, the Company can obtain extended financing terms. The interest rate on the vendor financing arrangements is determined based on the difference between LIBOR and a specified margin per the agreements. Obligations under the vendor financing arrangements are included in Short-term debt. As of December 31, 2015 there was no outstanding balance. As of December 31, 2014 the outstanding balance was $64 million.

Lines and Standby Letters of Credit

T-Mobile has an unsecured revolving credit facility with Deutsche Telekom which allows for up to $500 million in borrowings. As of December 31, 2015 and 2014, T-Mobile had no borrowings outstanding under this facility.

For the purposes of securing T-Mobile’s obligations to provide handset insurance services, T-Mobile maintains an agreement for standby letters of credit with JP Morgan Chase Bank, N.A. (“JP Morgan Chase”). For purposes of securing T-Mobile’s general purpose obligations, T-Mobile maintains a letter of credit reimbursement agreement with Deutsche Bank.

The following table summarizes the outstanding standby letters of credit under each agreement:



(in millions)	December 31, 2015		December 31, 2014
JP Morgan Chase	$	36	$	36
Deutsche Bank	54		50
Total outstanding balance	$	90	$	86