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AT&T Announces Financing Actions

In three separate actions, AT&T takes steps toward new bank facility, renews A/R securitization facility, registers $7B in notes

July 1, 2002

2 Min Read

NEW YORK -- AT&T said today it has successfully completed the initial phases of three separate financing initiatives. First, AT&T secured initial commitments for a new bank facility. In addition, the company renewed its Business Services customer accounts receivable securitization facility. And finally, the company's filing to register the U.S. dollar denominated private placement notes previously issued was declared effective by the Securities and Exchange Commission. AT&T said it has received initial commitments from Citibank, Credit Suisse First Boston, Goldman Sachs and JP Morgan for a significant portion of a new bank facility of up to $4 billion. The banks have also agreed to act as lead arrangers to syndicate the balance of the 364-day credit facility. Completion of this transaction is subject to customary closing conditions. The proposed new bank facility will replace AT&T's existing undrawn $8 billion facility, which matures in December 2002. The company noted that its successful deleveraging activities and short-term debt reduction efforts have contributed to its ability to halve the amount of the bank facility it requires. AT&T reduced its short-term debt, net of cash and excluding the current portion of monetization debt, to $2.4 billion as of March 31, 2002 -- a reduction of $27.1 billion from December 31, 2000. The new facility is expected to be adequate to back up any AT&T commercial paper or other short-term debt maturing over the course of the next year. AT&T said the new credit facility would remain in effect following the spinoff of AT&T Broadband and the close of its proposed merger with Comcast Corporation. Additionally, AT&T said it renewed its Business Services customer accounts receivable securitization facility, and in the coming weeks expects to renew its Consumer Services customer accounts receivable securitization facility, under which approximately $200 million is currently drawn. The Business Services facility will provide up to $1.65 billion of financing, based on the eligible receivables balance, which varies from month to month. While the term of this facility was extended to June 2003, it is currently undrawn. Finally, AT&T also said the SEC has declared effective the company's filing to register the $7 billion of U.S. dollar denominated notes issued in the November 2001 $10 billion global private placement note offering. The remaining $3 billion of notes are Euro denominated and are not subject to SEC registration. AT&T Corp.

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