Leap Wireless Refinances Debt With Cash Out to Fund Expansion

San Diego Leap Wireless International, Inc., a flat-rate wireless service carrier, is in the middle of a big expansion, and needs cash. Lots of it.

So, last week, the 1998 Qualcomm Inc. spinoff, which emerged from bankruptcy in August 2004, restructured $600 million in debt and obtained a $1.1 billion syndicated financing package.

Leap arranged a seven-year term loan of $900 million used to repay $593 million in debt plus interest, with the remainder, $295 million, to be used for working capital, acquisitions and build-out of its wireless networks. Leap’s main subsidiary, Cricket Communications, which operates its wireless networks, is moving into a variety of different mid-tier markets, including Cincinnati and Houston. It plans to enter San Diego by early 2007.

“It’s important for Leap to have a capital structure that provides good liquidity while balancing flexibility and cost,” said Dean Luvisa, Leap’s acting chief financial officer.

Besides the $900 million loan, Leap also arranged a $200 million line of credit that hadn’t been tapped as yet.

Interest on the new debt is LIBOR (London Interbank Overseas Rate) plus 2.75 percent, or 8.17 percent.

Leap said it can reduce the interest by a quarter of a point if its corporate debt is upgraded to B2 by Moody’s Investors Services. The firm’s current debt is rated B3, which is a grade below B2.

Banc of America Securities LLC and Goldman Sachs Credit Partners LP arranged the package funded by a variety of Banks and institutional investors, said Jim Seines, head of investor relations.

The $1.1 billion syndication replaces Leap’s former credit package of a $600 million term loan, and $110 million credit line.

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Torrey Pines Expands, Increases Profits:

Torrey Pines Bank, a subsidiary of Western Alliance Bancorp of Las Vegas, has found its stride since its May 2003 opening.

For the first quarter, the five-office lender based in Carmel Valley reported net income of $1 million compared to $224,000 for the year-ago period in 2005.

Total assets grew 49 percent to $438 million year-to-year, and total loans increased from $190 million to $344 million.

The profits pushed Torrey Pines’ return on average assets to 1.03 percent, compared to 0.32 percent for the like period of 2005.

A return on average assets is its net profits divided by a bank’s average assets, and better than 1 percent is regarded as above average by the industry.

Last month, the bank opened its fifth office in Downtown’s Symphony Towers, complementing another office on C Street. It also has branches in Carmel Valley, La Jolla and La Mesa.

Torrey Pines parent, Western Alliance, is growing at an even faster rate. Total assets as of March 31 were $3.58 billion, up 53 percent from the prior year’s first quarter. Its loan portfolio grew 77 percent to $2.3 billion.

Other Banks under the Western Alliance umbrella are BankWest of Nevada and Alliance Bank of Arizona. The company also operates two other units, Miller/ Russell