| Long-Term Debt, Net and Interest Expense | Note 12. Long-Term Debt, Net and Interest Expense Long-term debt, net consists of the following: (Amounts in millions, except percentages) Maturity Cash Interest Rate PIK Interest Rate (1) June 30, 2023 December 31, 2022 First Lien Notes 2027 7.000% 8.000% $ 525 $ — Second Lien Notes 2027 5.000% 6.000% 687 — Second Lien Exchangeable Notes 2027 5.000% 6.000% 188 — Third Lien Notes 2027 —% 12.000% 23 — Third Lien Exchangeable Notes 2027 —% 12.000% 270 — Junior LC Tranche (2) 2025 14.972% — 470 350 7.875% Senior Notes 2025 7.875% — 164 669 5.000% Senior Notes 2025 5.000% — 9 2,200 Other Loans 2023-2026 3.3% - 20.555% — 27 25 Total Aggregate principal value 2,363 3,244 Premium, net 583 — Deferred Financing costs, net (12) (14) Current portion of debt (Note 11) (24) (22) Total long-term debt, net $ 2,910 $ 3,208 (1) PIK Interest started accruing the day following the closing of the 2023 Debt Restructuring Transactions on May 6, 2023 and is payable by increasing the aggregate principal amount of an outstanding global or certificated note or issuing additional PIK Notes under the First Lien Indenture (each as defined and described below). (2) As of June 30, 2023, the reimbursement obligations under the Junior LC Tranche bear interest at the Term SOFR Rate with a floor of 0.75%, plus 9.90%. Principal Maturities — Combined aggregate principal payments for current and long-term debt as of June 30, 2023 were as follows: (Amounts in millions) Total Remainder of 2023 $ 5 2024 20 2025 644 2026 1 2027 1,693 2028 and beyond — Total minimum payments $ 2,363 Interest Expense — The Company recorded the following Interest expense in the Condensed Consolidated Statements of Operations: Three Months Ended June 30, Six Months Ended June 30, (Amounts in millions) 2023 2022 2023 2022 Interest paid or payable $ 89 $ 63 $ 166 $ 123 Deferred financing cost amortization (1) 24 96 68 149 Amortization of premium (11) — (11) — Total interest expense $ 102 $ 159 $ 223 $ 272 (1) The three and six months ended June 30, 2022 include $47 million of deferred financing costs expensed in connection with the Fourth Amendment to the Credit Agreement (as defined in Note 18). 2023 Debt Restructuring Transactions In March 2023, the Company and certain of its subsidiaries, including the Issuers, entered into a transaction support agreement (the “Transaction Support Agreement”), a backstop commitment agreement (the “Backstop Commitment Agreement”), a securities purchase and commitment agreement (the “SPA”) and certain other support agreements (collectively, the “Transactions Agreements”) relating to a series of contractually committed comprehensive Transactions (as defined below) with an ad hoc group (the “Ad Hoc Group”) of holders of 7.875% Senior Notes and 5.00% Senior Notes, Series II, SBG and certain affiliates thereof, a third party investor and certain other parties thereto, as applicable. The 2023 Debt Restructuring Transactions (as discussed and described below) decreased and extended the outstanding principal balance of the Company's total debt, excluding deferred financing costs, as follows: Balance Immediately Before the 2023 Debt Restructuring Transactions Par Value Exchange of Notes, Issuances and Repayments Issuance of Common Shares Adjustment to Carrying Value (1) Premium, net (2) Balance as of June 30, 2023 (Amounts in millions) 5.00% Senior Notes $ 2,200 $ (806) $ (560) $ (825) $ — $ 9 7.875% Senior Notes 669 (360) (45) (100) — 164 Secured Notes (3) 300 (300) — — — — First Lien Notes — 525 — — 242 767 Second Lien Notes — 687 — — 43 730 Second Lien Exchangeable Notes — 188 — — 120 308 Third Lien Notes — 23 — — 4 27 Third Lien Exchangeable Notes — 270 — — 174 444 Total debt subject to exchange in the 2023 Debt Restructuring Transactions 3,169 227 (605) (925) 583 2,449 Junior LC Tranche 470 470 Other Loans 27 27 Deferred financing costs, net (18) (12) Current portion of long-term debt (22) (24) Total long-term debt, net (3) $ 3,626 $ 2,910 (1) Includes troubled debt restructuring gain of $49 million included as a component of Other income (expense), net on the accompanying Condensed Consolidated Statement of Operations. (2) Premium, net to be amortized as a reduction of interest expense through maturity date in 2027. As of the date of the 2023 Debt Restructuring Transactions, the net premium included a premium of $875 million, net of a $281 million discount including $35 million of transaction costs paid to or on behalf of creditors and $241 million of unamortized deferred financing costs previously included as a component of Other Assets on the accompanying Condensed Consolidated Balance Sheet. (3) Balance immediately before the 2023 Debt Restructuring Transactions included $50 million of Secured Notes issued in April 2023. In April 2023, in connection with the 2023 Debt Restructuring Transactions, the Company obtained the approval of its stockholders at a special meeting to, among other things, adopt a certificate of amendment to the Company’s Second Amended and Restated Certificate of Incorporation (the “Charter Amendment”) to increase the total number of shares of Class A Common Stock that the Company has the authority to issue from 1,500,000,000 shares to 4,874,958,334 shares. Following such approval, the Company filed the Charter Amendment with the Secretary of State of the State of Delaware. In May 2023, the following transactions were consummated (collectively, the “2023 Debt Restructuring Transactions”): • The Issuers exchanged $505 million in aggregate principal amount of 7.875% Senior Notes and $541 million in aggregate principal amount of 5.00% Senior Notes, Series II, for (i) $687 million in aggregate principal amount of newly issued 11.00% Second Lien Senior Secured PIK Notes due 2027 (with interest per annum payable 5.00% in cash and 6.00% by increasing the outstanding principal amount thereof (“PIK”)) of the Issuers (the “Second Lien Notes”), (ii) $23 million in aggregate principal amount of newly issued 12.00% Third Lien Senior Secured PIK Notes due 2027 (with interest per annum payable in PIK only) of the Issuers (the “Third Lien Notes”) and (iii) 250 million shares of Class A Common Stock of the Company, in connection with the consummation of the Issuers’ separate offers to exchange (the “Exchange Offers”). • The Issuers issued and sold $500 million in aggregate principal amount of newly issued 15.00% First Lien Senior Secured PIK Notes due 2027, Series I (with interest per annum payable 7.00% in cash and 8.00% in PIK) of the Issuers (the “First Lien Notes, Series I”), to certain holders who participated in the Exchange Offers. In addition, the Company issued $25 million in aggregate principal amount of First Lien Notes, Series I to the members of the Ad Hoc Group party to the Backstop Commitment Agreement, as a backstop fee; • The Issuers and certain entities affiliated with SBG exchanged all of the $1.65 billion in aggregate principal amount of 5.00% Senior Notes, Series I, for (i) $188 million in aggregate principal amount of newly issued 11.00% Second Lien Senior Secured PIK Exchangeable Notes due 2027 (with interest per annum payable 5.00% in cash and 6.00% in PIK) of the Issuers (the “Second Lien Exchangeable Notes”), (ii) $270 million in aggregate principal amount of newly issued 12.00% Third Lien Senior Secured PIK Exchangeable Notes due 2027 (with interest per annum payable in PIK only) of the Issuers (the “Third Lien Exchangeable Notes”) and (iii) an aggregate of 1.1 billion shares of Class A Common Stock of the Company; • The Issuers redeemed $300 million in aggregate principal amount of Secured Notes, and the Issuers and SVF II entered into a new Master First Lien Senior Secured PIK Notes Note Purchase Agreement (the “First Lien NPA”) pursuant to which the Issuers agreed to issue and sell, at their option, and SVF II agreed to purchase, from time to time and subject to the terms and conditions set forth therein, up to $300 million in aggregate principal amount of newly issued 15.00% First Lien Senior Secured PIK Notes due 2027, Series II (with interest per annum payable 7.00% in cash and 8.00% in PIK) of the Issuers (the “First Lien Notes, Series II”). In connection with the entry into the First Lien NPA, the Issuers and SVF II terminated SVF II’s existing $500 million commitment under the Secured NPA (the foregoing transactions, the “SoftBank Rollover”); and • The Company issued and sold 35 million shares of Class A Common Stock in a private placement at a purchase price of $1.15 per share for aggregate proceeds of $40 million to a third party investor pursuant to the SPA. In addition, pursuant to the SPA, the Issuers agreed to issue and sell, at their option, and the third party investor agreed to purchase, from time to time and subject to the terms and conditions set forth therein, up to $175 million in aggregate principal amount of newly issued 15.00% First Lien Senior Secured PIK Notes due 2027, Series III (with interest per annum payable 7.00% in cash and 8.00% in PIK) of the Issuers (the “First Lien Notes, Series III”, and collectively with the First Lien Notes, Series II, the "Delayed Draw Notes" and the First Lien Notes, Series I, the First Lien Notes, Series II, and the First Lien Notes, Series III, collectively, the "First Lien Notes"). Any draw request by the Issuers under the First Lien Notes, Series II and the First Lien Notes, Series III shall be made as follows: (i) the first $250 million under the First Lien Notes, Series II and the first $125 million under the First Lien Notes, Series III shall be drawn ratably; and (ii) the final $50 million under each of the First Lien Notes, Series II and the First Lien Notes, Series III shall be drawn ratably. In July 2023, the Company issued $117 million in aggregate principal balance of First Lien Notes, Series II and $58 million in aggregate principal balance of First Lien Notes, Series III under the First Supplemental Indenture (each as defined below), and $300 million remains available to draw as of the date hereof. We performed an assessment on a lender by lender basis to identify certain lenders that met the criteria for troubled debt restructuring (“TDR”) under ASC 470-60, Troubled Debt Restructurings by Debtors (“ASC 470-60”). We accounted for the exchange of approximately $855 million principal amount of debt, including 7.875% Senior Notes and 5.00% Senior Notes, Series II (collectively, "Old Notes"), for approximately $641 million principal amount of Second Lien Notes, shares of Class A Common Stock with a fair value of approximately $61 million, as well as the purchase of $467 million principal amount of First Lien Notes as a modification of debt as the lenders did not grant a concession and the difference between the present value of the old and new cash flows was less than 10%. We accounted for the exchange of approximately $98 million principal amount of Old Notes for shares of Class A Common Stock with a fair value of approximately $43 million, as well as the purchase of $8 million principal amount of First Notes as a TDR, resulting in a gain recognition of approximately $40 million, included as a component of Other income (expense), net on the accompanying Condensed Consolidated Statements of Operations during the three and six months ended June 30, 2023. The $40 million gain on extinguishment of debt included a TDR gain on the carrying value adjustment of $49 million, partially offset by a $9 million write-off of deferred financing costs previously included in other assets. We accounted for the exchange of approximately $93 million principal amount of Old Notes for approximately $46 million principal amount of Second Lien Notes, approximately $23 million principal amount of Third Lien Notes, shares of Class A Common Stock with a fair value of approximately $7 million, as well as the purchase of $25 million of First Lien Notes as a TDR. The TDR did not result in a gain recognition and we established new effective interest rates based on the revised cash flows and the remaining net carrying value of the Old Notes. We accounted for the exchange of approximately $1.65 billion of 5.00% Senior Notes, Series I and $300 million Secured Notes held by certain entities affiliated with SBG for approximately $188 million principal amount of Second Lien Exchangeable Notes, approximately $270 million principal amount of Third Lien Exchangeable Notes, shares of Class A Common Stock with a fair value of approximately $494 million, the repayment of $300 million of Secured Notes outstanding, as well as a commitment to purchase up to $300 million of Delayed Draw First Lien Notes, as a TDR. The TDR did not result in a gain recognition, and we established new effective interest rates based on the revised cash flows and the remaining net carrying value of the 5.00% Senior Notes, Series I and Secured Notes. The Company recognized $111 million in additional paid-in capital for the issuance of approximately 250 million shares of Class A Common Stock, reflecting the fair value of the shares, in exchange for Old Notes. The Company recognized $494 million in additional paid-in capital for the issuance of approximately 1.1 billion shares of Class A Common Stock, reflecting the fair value of the shares, in exchange for 5.00% Senior Notes, Series I held by companies affiliated with SBG. The Company also issued 35 million shares of Class A Common Stock to a third party investor for cash proceeds of approximately $40 million, and recognized $34 million in additional-paid in capital, representing the fair market value of the Company's Class A Common Stock on the date of the SPA. The residual excess $6 million was accounted for as vendor consideration and included as a component of other current liabilities and other liabilities of $2 million and $4 million, respectively, as of June 30, 2023. The vendor consideration will be amortized over the 3-year term of a commercial arrangement entered into with the third party investor as a component of selling, general and administrative expenses on the accompanying Condensed Consolidated Statements of Operations. The Company assessed all terms and features of the newly issued notes in connection with the 2023 Debt Restructuring Transactions (collectively, the "Exchange Notes") in order to identify any potential embedded features that would require bifurcation. As part of this analysis, the Company assessed the economic characteristics and risks of the Exchange Notes, including the exchange, put and call features. The Company determined that all features of the Exchange Notes were either clearly and closely related with a debt host and did not require bifurcation as a derivative liability, or the fair value of the feature was immaterial to the Company’s consolidated financial statements as of June 30, 2023 due to there being no circumstances or events indicating the possibility of triggering those features being anything but remote. Transaction costs In connection with the 2023 Debt Restructuring Transactions, the Company incurred $10 million of costs on behalf of certain creditors related to newly issued notes and recognized them as a debt discount included, net of accumulated amortization, as a component of long-term debt, net, and $3 million of debt issuance costs related to the First Lien Notes, Series III and capitalized as a deferred financing cost and included, net of accumulated amortization, as a component of other assets, each on the accompanying Condensed Consolidated Balance Sheets. In addition, the $25 million backstop fee paid to the Ad Hoc Group in the form of newly issued First Lien Notes was recognized as a debt discount, net of accumulated amortization, as a component of long-term debt, net, on the accompanying Condensed Consolidated Balance Sheets. Each of these deferred financing costs will be amortized as a component of interest expense through the maturity of the applicable debt on April 15, 2027. The Company recognized $28 million of costs as a reduction of additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets, including $6 million of equity issuance costs and $22 million of costs incurred on behalf of a related party. The Company also incurred none and $12 million of transaction costs during the three and six months ended June 30, 2023, respectively, which were recognized as a component of restructuring and other related (gains) costs on the accompanying Condensed Consolidated Statements of Operations. First Lien Indenture — The First Lien Senior Secured PIK Notes Indenture, dated as of May 5, 2023, by and among the Issuers, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the "First Lien Notes Indenture"), governs three series of notes, each with the same terms: (i) the $525 million in aggregate principal amount of First Lien Notes, Series I (15.000% First Lien Senior Secured PIK Notes due 2027, Series I), (ii) the up to $300 million in aggregate principal amount of First Lien Notes, Series II that may be issued and sold by the Issuers from time to time to SVF II (as defined below) pursuant to the First Lien NPA (as defined below) and (iii) the up to $175 million in aggregate principal amount of First Lien Notes, Series III that may be issued and sold by the Issuers from time to time to a third party investor (the “Third Party Investor”) pursuant to that certain Securities Purchase and Commitment Agreement, dated as of March 17, 2023 (the “Third Party SPA”), by and among the Company, the Issuers and the Third Party Investor. The First Lien Notes will mature on August 15, 2027 and bear interest at a rate of 15.00% per annum, payable semi-annually in arrears, with 7.00% payable in cash and 8.00% payable in the form of PIK Interest. PIK Interest is payable on each interest date by increasing the aggregate principal amount of an outstanding global note or issuing additional PIK Notes under the First Lien Indenture (each as defined, and in accordance with the terms set forth, in the First Lien Notes Indenture). The First Lien Notes and the related guarantees are secured by a first-priority security interest (subject to permitted liens) in the existing and future assets of the Issuers and the Subsidiary Guarantors (as defined below) (other than cash collateral for the Issuer’s letter of credit facilities and certain other exceptions) that secure the Issuer’s letter of credit facilities, the other secured notes and certain other secured indebtedness of the Issuers or any Subsidiary Guarantors in excess of a specified threshold, subject to permitted liens and certain exceptions described herein (the “Collateral”). The First Lien Notes are guaranteed, jointly and severally, fully and unconditionally, on a senior first-priority basis by each of the Issuer’s wholly-owned restricted subsidiaries that guarantee the Issuer’s obligations under the senior letter of credit facility and junior letter of credit facility under the Credit Agreement, dated as of December 27, 2019 (as amended, waived or otherwise modified from time to time) and certain other subsidiaries of the Issuer (collectively, the “Subsidiary Guarantors”). In addition, the First Lien Notes are guaranteed fully and unconditionally, on a senior unsecured basis, by the Company. Redemption Prior to November 1, 2024, the Issuers may redeem the First Lien Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest (including PIK Interest), if any, to (but not including) the applicable redemption date, plus the applicable “make-whole” premium. In addition, at any time and from time to time prior to November 1, 2024, the Issuer may redeem up to 35% of the aggregate principal amount of First Lien Notes at a redemption price equal to 115% of the principal amount thereof, plus accrued and unpaid interest (including PIK Interest), if any, to (but not including) the redemption date, with an amount not to exceed the net cash proceeds from certain equity offerings. At any time and from time to time on or after November 1, 2024, the Issuer may redeem the First Lien Notes, in whole or in part, at redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest (including PIK Interest), if any, to (but not including) the applicable redemption date. Change of Control If a Change of Control (as defined in the First Lien Notes Indenture) occurs, the Issuer is required to make an offer to purchase all of the First Lien Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to (but not including) the date of purchase. Covenants and Events of Default The terms of the First Lien Notes Indenture, among other things, substantially limit the Issuer’s ability to (i) declare or pay any dividend or make any distribution; (ii) purchase, redeem, or retire any equity interests of the Issuer held by persons other than the Issuer or a restricted subsidiary; (iii) make any principal payment on, or purchase, repurchase, redeem, or defease any restricted debt; or (iv) make any restricted investment. These covenants are subject to limited exceptions, limitations and qualifications that are described in the First Lien Notes Indenture. The First Lien Notes Indenture provides for customary events of default (subject in certain cases to grace and cure periods), including with respect to payment defaults, failure to pay certain judgments and certain events of bankruptcy and insolvency. These events of default are subject to a number of important exceptions, limitations and qualifications that are described in the First Lien Notes Indenture. Second Lien Notes Indenture — The terms of the Second Lien Notes are substantially similar to the terms of the First Lien Notes, except that: (i) the Second Lien Notes bear interest at a rate of 11.00% per annum, payable semi-annually in arrears, with 5.00% per annum payable in cash and 6.00% per annum payable in the form of PIK Interest (as defined, and in accordance with the terms set forth, in the Second Lien Senior Secured PIK Notes Indenture, dated as of May 5, 2023, by and among the Issuers, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent, (ii) the Second Lien Notes are secured by a second-priority lien on the Collateral and (iii) at any time and from time to time on or after the issue date, the Issuer may redeem the Second Lien Notes, in whole or in part, at 101.0% of the principal amount thereof, plus accrued and unpaid interest (including PIK Interest), if any, to (but not including) the applicable redemption date. Third Lien Notes Indenture — The terms of the Third Lien Notes are substantially similar to the terms of the First Lien Notes, except that: (i) the Third Lien Notes bear interest at a rate of 12.00% per annum, payable semi-annually in arrears solely in the form of PIK Interest (as defined, and in accordance with the terms set forth, in the Third Lien Senior Secured PIK Notes Indenture, dated as of May 5, 2023, by and among the Issuers, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the "Third Lien Notes Indenture")), (ii) the Third Lien Notes are secured by a third-priority lien on the Collateral and (iii) at any time and from time to time on or after the issue date, the Issuer may redeem the Third Lien Notes, in whole or in part, at 101.0% of the principal amount thereof, plus accrued and unpaid interest (including PIK Interest), if any, to (but not including) the applicable redemption date. Second Lien Exchangeable Notes Indenture — The Second Lien Exchangeable Notes will mature on August 15, 2027 and bear interest at a rate of interest at a rate of 11.00% per annum, payable semi-annually in arrears, with 5.00% per annum payable in cash and 6.00% per annum payable in the form of PIK Interest (as defined, and in accordance with the terms set forth, in the Second Lien Exchangeable Notes Indenture, dated as of May 5, 2023, by and among the Issuers, the guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee and collateral agent (the "Second Lien Exchangeable Notes Indenture"). The Second Lien Exchangeable Notes and the related guarantees are secured by a second-priority security interest (subject to permitted liens) on the Collateral. The Second Lien Exchangeable Notes are guaranteed, jointly and severally, fully and unconditionally, on a senior second-priority basis by the Subsidiary Guarantors. In addition, the Second Lien Exchangeable Notes are guaranteed fully and unconditionally, on a senior unsecured basis, by the Company. Redemption At any time and from time to time on or after the issue date, the Issuer may redeem the Second Lien Exchangeable Notes, in whole or in part, at 101.0% of the principal amount thereof, plus accrued and unpaid interest (including PIK Interest), if any, to (but not including) the applicable redemption date. Change of Control If a Change of Control (as defined in the Second Lien Exchangeable Notes Indenture) occurs, the Issuer is required to make an offer to purchase all of the Second Lien Exchangeable Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to but not including the date of purchase. Covenants and Events of Default The terms of the Second Lien Exchangeable Notes Indenture, among other things, substantially limit the Issuer’s ability to (i) declare or pay any dividend or make any distribution; (ii) purchase, redeem, or retire any equity interests of the Issuer held by persons other than the Issuer or a restricted subsidiary; (iii) make any principal payment on, or purchase, repurchase, redeem, or defease any restricted debt; or (iv) make any restricted investment. These covenants are subject to limited exceptions, limitations and qualifications that are described in the Second Lien Exchangeable Notes Indenture. The Second Lien Exchangeable Notes Indenture provides for customary events of default (subject in certain cases to grace and cure periods), including with respect to payment defaults, failure to pay certain judgments and certain events of bankruptcy and insolvency. These events of default are subject to a number of important exceptions, limitations and qualifications that are described in the Second Lien Exchangeable Notes Indenture. Exchange Mechanics At any time prior to the close of business on the second scheduled trading day immediately preceding the final maturity date of the Second Lien Exchangeable Notes, holders of the Second Lien Exchangeable Notes shall have the right, at their option, to surrender for exchange all or a portion of the Second Lien Exchangeable Notes at the Exchange Rate (as defined in the Second Lien Exchangeable Notes Indenture). The Exchange Rate is initially set at 832.8614 shares of Class A Common Stock per $1,000 in principal amount exchanged, which reflects a price of $1.20068 per share of Class A Common Stock, which price is equal to 130% the Common Equity VWAP (as defined in the Second Lien Exchangeable Notes Indenture). The Exchange Rate is subject to customary adjustments and anti-dilution protections. The Issuer may satisfy its exchange obligation either solely in cash, with shares of Class A Common Stock of the Company or with a combination of cash and shares of Class A Common Stock of the Company. On or after November 5, 2024, and at any time until the close of business on the second scheduled trading day immediately preceding the final maturity date of the Second Lien Exchangeable Notes, if at any time (i) Wholly Owned Net Cash and Cash Equivalents and availability under Debt Facilities (each as defined in the Second Lien Exchangeable Notes Indenture) existing on the issue date is greater than $250 million and (ii) the Daily VWAP (as defined in the Second Lien Exchangeable Notes Indenture) of the shares of Class A Common Stock for a least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days is greater than or equal to 250% of the Common Equity VWAP (as defined in the Second Lien Exchangeable Notes Indenture), the Issuer shall be required to exchange all of the then outstanding principal amount of Second Lien Exchangeable Notes at the Exchange Rate then in effect. Third Lien Exchangeable Notes Indenture — The terms of the Third Lien Exchangeable Notes are substantially similar to the terms of the Second Lien Exchangeable Notes, except that: (i) the Third Lien Exchangeable Notes bear interest at a rate of 12.00% per annum, payable semi-annually in arrears solely in the form of PIK Interest (as defined, and in accordance with the terms set forth, in the Third Lien Exchangeable Notes Indenture) and (ii) the Third Lien Exchangeable Notes are secured by a third-priority lien on the Collateral. First Lien NPA — In connection with the SoftBank Rollover, the Issuers and SVF II entered into that certain Master First Lien Senior Secured PIK Notes Note Purchase Agreement, dated as of May 5, 2023 (the “First Lien NPA”), pursuant to which the Issuers agreed to issue and sell, at their option, and SVF II agreed to purchase, from time to time, up to $300 million in aggregate principal amount of 15.00% First Lien Senior Secured PIK Notes due 2027, Series II (with interest per annum payable 7.00% in cash and 8.00% in PIK) (the “SoftBank Delayed Draw Notes”), issued under the First Lien Notes Indenture. The SoftBank Delayed Draw Notes have the same terms, and are issued under the same indenture, but as a separate series, as the First Lien Notes. Secured Notes — In November 2022, the Issuers, the Notes Purchaser and SVF II, entered into a second amendment to the Secured NPA pursuant to which, among other things and subject to the terms and conditions set forth therein, (i) the Commitment, Draw Period (each as defined in the Secured NPA), and maturity date of the Secured Notes were extended from February 12, 2024 to March 15, 2025 (such period from February 12, 2024 to March 15, 2025, the “Second Extension Period”), (ii) the maximum aggregate principal amount of Secured Notes subject to the Commitment or that may be issued and outstanding at any time was reduced to $500 million , subject to potential additional reductions to approximately $446 million during the Second Extension Period to take into account interest that may accrue and be payable in-kind during such period, (iii) the interest per annum payable on the Secured Notes outstanding during all or a portion of the Second Extension Period will increase from 7.50% to 11.00% during such period and such interest shall be payable in-kind during such period by increasing the principal amount of the Secured Notes then outstanding, (iv) the Notes Purchaser assigned its rights and obligations under the Secured NPA to SVF II and (v) the Company agreed to pay SVF II a commitment fee of $10 million. The Company has the ability to draw the Secured Notes under the Secured NPA until March 15, 2025. During the three and six months ended June 30, 2023, the Issuers issued and sold $50 million and $300 million, respectively, of Secured Notes to SVF II under the Secured NPA. In May 2023, in connection with the 2023 Debt Restructuring Transactions described above, the Issuers redeemed $300 million of Secured Notes, and the Issuers and SVF II terminated SVF II’s existing $500 million commitment under the Secured NPA. Junior LC Tranche — In May 2022, WeWork Companies LLC entered into an amendment to the Credit Agreement (as defined and discussed in Note 18) pursuant to which, among other things, the existing 2020 LC Facility was amended and subdivided into the $1.25 billion Senior LC Tranche, which was then scheduled to automatically decrease to $1.05 billion in February 2023 and terminate in February 2024, and a $350 million Junior LC Tranche which was then scheduled to terminate in November 2023 (both as defined in Note 18). In December 2022, the Company entered into a further amendment to the Credit Agreement (as discussed in Note 18) pursuant to which, among other things, (i) the termination date of the existing Senior LC Tranche was extended to March 14, 2025, and (ii) the Senior LC Tranche was reduced to $1.1 billion, with a further decrease to $930 million on February 10, 2023. The amendments to the Credit Agreement were accounted for under ASC 470-50, Debt - Modifications and Extinguishments , whereby the unamortized deferred financing costs assoc |
