Sprint Nextel, the struggling third-largest mobile network operator in the US, has staved off the the risk of default by renegotiating its bank credit agreements.

Sprint has replaced a $6bn revolving credit facility with a $4.5bn agreement due in 2010. The new terms allow Sprint to carry more debt relative to earnings and provide the company with much additional financial flexibility as it struggles to stem customer losses and return to profitability in the face of the economic downturn.