CDB provides $250 million non-Sinosure-covered credit agreement with Nextel Brazil for construction of 3G network (Linked to Project ID#59821)

On April 20, 2012, China Development Bank (CDB) signed a $500 million credit facility agreement with Nextel Telecomunicações Ltda. (“Nextel Brazil”), the Brazilian operating subsidiary of NII Holdings, Inc., to finance the cost of network infrastructure equipment and the deployment of the WCDMA (3G phone) network in Brazil, a collaboration between Huawei and Nextel. According to a 2019 SEC filing, the $500 million credit facility was divided into a $250 million Sinosure Credit Agreement and a $250 million non-Sinosure Credit Agreement. Project ID#60229 records the $250 million non-Sinosure Credit Agreement and Project ID#59821 records the Sinosure Credit Agreement. The borrowing terms under these credit agreements include a floating interest rate set to LIBOR plus 2.90% (3.15% and 3.21% as of December 31, 2013 and 2012, respectively), a 2% default (penalty) interest rate, a 3-year grace period. a 10-year maturity (final maturity date: June 2022). Assets purchased using the amounts borrowed under Nextel Brazil's equipment financing facilities are pledged as collateral. There are signs that the $500 million CDB credit facility has financially underperformed vis-a-vis the original expectations of the lender. According to the US Securities and Exchange Commission, Section 10.4 of the report indicates that Nextel Brazil amended and restated both the Sinosure and non-Sinosure credit agreements it made with China Development Bank. "Final Amendments" include 1) the deferral of principal payments and certain financial compliance for the first 48 months until June 30 2020, 2) Nextel Brazil will be subject to minimum cash and minimum receivable requirements, 3) Loan maturity will be 98 months from when Final Amendments become effective. Additionally, Nextel Brazil will grant additional security interests to CDB and Banco de Brasil SA and Caiza Economica Federal (the latter two have separate agreements with Nextel) in the form of preferential rights to amounts held in Nextel Brazil’s bank accounts and will pledge certain of its equipment and property to these lenders.

Additional details

1. The Sinosure-covered loan agreement can be accessed in its entirety via https://content.edgar-online.com/ExternalLink/EDGAR/0001037016-17-000039.html?hash=01275772374562477f1860c16b691ff4c0eca24827332a725ebeba28384882a6&dest=A102CDBNONSINOSURE_HTM#A101CDBSINOSURE_HTM. 2. The non Sinosure-covered loan agreement can be accessed in its entirety via https://content.edgar-online.com/ExternalLink/EDGAR/0001037016-17-000039.html?hash=01275772374562477f1860c16b691ff4c0eca24827332a725ebeba28384882a6&dest=A102CDBNONSINOSURE_HTM#A102CDBNONSINOSURE_HTM. 3. The amended and restated agreement from 2017 can be accessed it its entirety via https://www.dropbox.com/s/oyvixpqev84eu2x/Brazil%202017%20CDB%20Amended%20Loan%20with%20Nextel%20Telecomunica%C3%A7%C3%B5es%20S.A.pdf?dl=0

Number of official sources

5

Number of total sources

6