Item 1.01. Entry into a Material Definitive Agreement
On January 27, 2022, USCC EIP LLC (USCC EIP), a wholly-owned subsidiary of United States Cellular Corporation (UScellular) entered into a Master Framework Agreement and a Master Repurchase Agreement (collectively, the Transaction Agreements) with MUFG Bank, Ltd., New York Branch (MUFG), each such agreement effective as of January 26, 2022 (Effective Date).
Under the Transaction Agreements, USCC EIP may sell eligible equipment installment plan receivables to MUFG on an uncommitted basis, subject to repurchase by USCC EIP at the end of the term, which may extend up to one month. Subject to the availability of eligible receivables, USCC EIP may borrow up to $200 million from MUFG. MUFG will hold a security interest in any transferred receivables.
The borrowings will bear monthly interest at a rate of secured overnight financing rate (SOFR) plus 1.25%.
USCC EIP must provide certain representations and warranties to MUFG as of the Effective Date and at the time of each borrowing. Additionally, UScellular is a guarantor of USCC EIP's performance under the Transaction Agreements. UScellular does not guarantee that the receivables are collectible.
The expiration date of the Transaction Agreements is January 31, 2023.
The foregoing brief description is qualified by reference to the copy of the Exhibits attached hereto, which are incorporated herein by reference.
MUFG and/or its affiliates may have various relationships with UScellular, its parent, Telephone and Data Systems, Inc. (TDS), and their subsidiaries involving banking or other financial services, including checking, cash management, brokerage, lending, investment banking, depository, indenture trustee and/or other services.