New York, January 12, 2017 -- Moody's Investors Service, ("Moody's") has upgraded Sprint Corporation's ("Sprint") corporate family rating ("CFR") to B2 from B3 and probability of default rating ("PDR") to B2-PD from B3-PD based on Sprint's sustained operational performance and improved liquidity. Moody's has also assigned Ba2 ratings to Sprint Communications, Inc.'s proposed $2 billion senior secured revolving credit facility due 2021 and $1.5 billion senior secured term loan B due 2024. The proceeds of the term loan will be used for general corporate purposes.

Moody's has also upgraded the ratings of existing unsecured notes at Sprint, Sprint Communications, Inc. (SCI) and Sprint Capital Corporation (SCC) to B3 from Caa1 and upgraded Clearwire Communications LLC's unsecured exchangeable notes to Ba3 from B1.

Moody's has affirmed the B1 rating for SCI's junior guaranteed unsecured notes. These notes are not being upgraded in conjunction with the CFR upgrade due to the increase in Sprint's senior liabilities, including the guarantee liability from Sprint's recent spectrum ABS notes issuance, which reduces the potential recovery on this debt class. Upon closing of the secured credit facility, SCI's $200 million 9.25% Debentures due 2022 will become secured, which is likely to result in an upgrade to Ba2, in line with the senior secured debt.

Moody's has also affirmed Sprint's speculative grade liquidity rating of SGL-3. The CFR and PDR upgrades reflect Sprint's continued improvement in operations and improved liquidity position from its recent financing transactions. The outlook remains stable.

Moody's has taken the following rating actions:

.Issuer: Sprint Corporation

..Corporate Family Rating -- B2, from B3

..Probability of Default Rating -- B2-PD, from B3-PD

..Speculative Grade Liquidity Rating -- affirmed at SGL-3

..Outlook -- remains Stable

..Backed Senior Unsecured Notes -- B3, LGD 5, from Caa1, LGD5

..Backed Senior Unsecured Shelf -- (P)B3 from (P)Caa1

.Issuer: Sprint Communications, Inc.

..Outlook -- remains Stable

..Backed Senior Secured $2B Revolving Credit Facility -- Assigned Ba2, LGD1

..Backed Senior Secured $1.5 Term Loan B -- Assigned Ba2, LGD1

..Backed Senior Unsecured Bank Credit Facility, Affirmed Ba3 LGD2

..Senior Unsecured Notes -- B3, LGD 5, from Caa1, LGD5

..Junior Guaranteed Unsecured Notes -- affirmed B1 (to LGD3 from LGD2)

.Issuer: Sprint Capital Corporation

..Outlook -- remains Stable

..Backed Senior Unsecured Notes -- B3, LGD 5, from Caa1, LGD5

.Issuer: Clearwire Communications LLC

..Outlook -- remains Stable

..Backed Exchangeable Notes due 2040 -- Ba3, LGD3, from B1, LGD3

RATINGS RATIONALE

Over the past year, Sprint's management team has reversed the company's trajectory from negative to positive, both from an operational and financial standpoint. Sprint remains a challenger to its much larger peers, but the company now has a solid footing to continue improvement. Sprint has meaningful capital requirements, but it can now access multiple pools of capital, including secured bank loans, securitization facilities, spectrum ABS and traditional high yield bonds, each with capacity to borrow. This has reduced Sprint's refinance risk and its dependence upon the often-volatile high yield bond market.

Sprint's promotional activities and network optimization strategy have led to improved operating performance, resulting in lower churn, positive net adds and more stable monthly average-billings-per-unit ("ABPU") trends. Despite the heavy promotional activity, profitability has remained stable due to Sprint's cost reduction initiatives, resulting in more than $1.1 billion year-to-date reductions in cost of service and SG&A expenses. Sprint expects $2 billion or more of run rate reductions exiting FY2016. Despite these improvements, Sprint still faces many challenges to transition to a self-funding business model, including more improvement to its cost structure, heavy network investment and its challenging debt maturity profile. Sprint's strategy relies upon aggressive price competition, which requires a material improvement in cost structure to transition to positive free cash flow.

Sprint has made a series of financing transactions, including the proposed credit facility and $3.5 billion of wireless spectrum-backed notes issued in October 2016, that will improve its available liquidity. Pro-forma for the new credit facility and issuance of spectrum notes, Sprint's total committed general purpose liquidity as of September 30 was approximately $16.4 billion, including $8.9 billion of cash and cash equivalents plus unused capacity under its Receivables Facility. This provides Sprint with sufficient liquidity for the next 18 months to meet all debt maturities, operating cash deficits, capital investments and other financing obligations which Moody's estimates will require up to $15 billion of cash.

Sprint's B2 CFR reflects its high leverage of approximately 5.5x (Moody's adjusted) as of September 30, 2016, intense competitive challenges and our projection for negative free cash flow (excluding cash realized from securitizations) through at least FY2017. The rating incorporates a one notch lift from our expectation that Sprint's parent company and majority shareholder, SoftBank Group Corp. ("SoftBank", Ba1 CFR, stable outlook) will seek to retain the viability of Sprint as a going concern. Moody's views Softbank's implicit support as a key factor in Sprint's ability to accomplish its improved liquidity profile and, as such, views these actions as supportive of the one-notch implicit support uplift to Sprint's rating. The rating also recognizes Sprint's recent financing transactions to fund its network modernization plan and address upcoming maturities, improving operating performance, its ongoing cost reduction initiatives, and its valuable spectrum assets.

The ratings for the debt instruments reflect both the overall probability of default of Sprint, to which Moody's assigns a PDR of B2-PD, and the loss given default assessments of individual debt instruments. The $3.5 billion senior secured credit facility at Sprint Communications, Inc. is rated Ba2 (LGD1). The three-notch lift from the B2 CFR reflects the structural seniority provided by the guarantees and the security over all tangible and intangible assets of Sprint and its operating subsidiaries.

Sprint Corp. and SCI's senior unsecured notes are rated B3 (LGD5) reflecting their junior-most position in the capital structure. The B3 (LGD5) unsecured rating for Sprint's subsidiary, Sprint Capital Corporation (SCC), reflects the guarantees from the parent on a senior unsecured basis. Our loss-given-default estimate for the B3-rated unsecured notes positions them near the limit of the B3 rating. Additional subordination in the form of incremental senior debt or a reduction in the size of the unsecured class (which would reduce its loss absorption capacity) would likely result in a downgrade to Caa1. Our current loss-given-default estimate incorporates our assumption that Sprint will raise an additional $3.5 billion in spectrum ABS notes and repay existing unsecured notes as they mature in fiscal 2016 and 2017.

SCI's junior guaranteed unsecured notes are rated B1 (LGD3) reflecting seniority ahead of the senior unsecured notes of Sprint Corp, SCI and SCC and subordinate ranking to the senior secured credit facility and other senior liabilities.

Clearwire's exchangeable notes are rated Ba3 (LGD3) and are supported by an irrevocable and unconditional guarantee from Sprint Corp. and SCI. The rating is given additional uplift due to the high asset coverage provided by Clearwire's extensive spectrum holdings.

Moody's ranks the secured lease guarantee associated with Sprint's wireless spectrum-backed notes (which will be granted security up to $3.5 billion), EDC term loans and receivables financing facilities pari passu to Sprint's senior secured credit facility.

The stable outlook reflects Sprint's improved operating profile and our view that its liquidity can address near term maturities and the cash needed to fund its business for the next 18 months.

Moody's could upgrade Sprint's ratings if the company is on track to achieve positive free cash flow and leverage (Moody's adjusted) approaches 5x. We define free cash flow as cash from operations less capex and we include handset financing needs as an operating cash flow. In addition, an upgrade would be predicated upon Sprint maintaining committed, general purpose liquidity sufficient to address at least 18 months of total cash needs, including capital expenditures and debt maturities.

Moody's could downgrade Sprint's ratings if leverage is sustained above 5.5x (Moody's adjusted) or if liquidity is not sufficient to address 18 months of total cash needs. A downgrade could also result from a deterioration in Sprint's operating performance, which could include rising churn, weak subscriber trends or if Sprint introduces irrational price plans. Also, if Moody's believes that SoftBank's commitment to Sprint deteriorates, a rating downgrade is likely.

The principal methodology used in these ratings was Global Telecommunications Industry published in December 2010. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Mark Stodden

VP - Senior Credit Officer

Corporate Finance Group

Moody's Investors Service, Inc.

250 Greenwich Street

New York, NY 10007

U.S.A.

JOURNALISTS: 212-553-0376

SUBSCRIBERS: 212-553-1653



John Diaz

MD - Corporate Finance

Corporate Finance Group

JOURNALISTS: 212-553-0376

SUBSCRIBERS: 212-553-1653



Releasing Office:

Moody's Investors Service, Inc.

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New York, NY 10007

U.S.A.

JOURNALISTS: 212-553-0376

SUBSCRIBERS: 212-553-1653

