(Bloomberg) -- AT&T Inc. is in early discussions with a group of banks to raise $14 billion to help buy more 5G airwaves, according to people with knowledge of the matter.
It will be structured as a 364-day delayed-draw term loan with commitments due on Jan. 27, the people said, asking not to be named discussing a private transaction. Bank of America Corp. is leading the transaction, they said.
The talks come as competitor T-Mobile US Inc. borrowed $3 billion in the bond market to help fund spectrum purchases, as communications providers are amping up their bids in an expensive battle. The auction -- which still has several more rounds of bidding ahead -- has now surged past $80.8 billion, well above analysts’ estimates of $47 billion.
Read more from Bloomberg Intelligence: AT&T, Verizon May Tap Bond Market as C-Band Bids Hit $70 Billion
Representatives for AT&T and Bank of America declined to comment.
AT&T is seeking the loan from its banking group, rather than T-Mobile’s approach of reaching out to investors. The delayed-draw structure allows the company to wait to tap the facility until the cash is needed, and the one-year structure implies that the loan would likely be refinanced in the bond market.
When AT&T does draw the loan, it may have to pay a spread of 100 basis points over the London interbank offered rate, based on early discussions, the people said. It will also have to pay an upfront fee of five basis points once the transaction closes, as well as a 10 basis point facility fee, the people said.
While AT&T has been deleveraging in the years following its $85 billion acquisition of Time Warner Inc. in 2018, it still had roughly $159 billion of debt at the end of the third quarter, making it the world’s largest nonfinancial corporate borrower. A large spectrum investment could put its leverage ratio outside raters’ thresholds for a mid BBB rating, but it’s unlikely to result in a downgrade, said Bloomberg Intelligence analyst Stephen Flynn.
“AT&T has less financial flexibility at the current rating to acquire spectrum for its 5G network build,” S&P Global Ratings said in a Jan. 7 report.
Últimas Noticias
Debanhi Escobar: they secured the motel where she was found lifeless in a cistern
Members of the Specialized Prosecutor's Office in Nuevo León secured the Nueva Castilla Motel as part of the investigations into the case
The oldest person in the world died at the age of 119
Kane Tanaka lived in Japan. She was born six months earlier than George Orwell, the same year that the Wright brothers first flew, and Marie Curie became the first woman to win a Nobel Prize
Macabre find in CDMX: they left a body bagged and tied in a taxi
The body was left in the back seats of the car. It was covered with black bags and tied with industrial tape
The eagles of America will face Manchester City in a duel of legends. Here are the details
The top Mexican football champion will play a match with Pep Guardiola's squad in the Lone Star Cup
Why is it good to bring dogs out to know the world when they are puppies
A so-called protection against the spread of diseases threatens the integral development of dogs
