8-KMaterial AgreementsFinancial EventsExhibits & Filings

AT&T INC. 8-K Report, Material Agreement (Feb 5, 2018)

Filed February 5, 2018For Securities:TT-PCTBBT-PA

Summary

AT&T Inc. (T) filed an 8-K on February 5, 2018, to report on a significant amendment to its existing credit facility. The company entered into a letter amendment to its $10 billion Term Loan Credit Agreement, originally dated November 15, 2016. This amendment substantially increases the available credit lines under both Tranche A and Tranche B, from $5 billion each to approximately $8.0875 billion each, effectively doubling the total potential borrowing capacity related to these tranches. Furthermore, the amendment extends the Commitment Termination Date for these credit lines to December 31, 2018. The primary purpose of this expanded and extended credit facility remains to finance a portion of the cash consideration for AT&T's pending merger with Time Warner Inc., as well as to facilitate the refinancing of Time Warner's existing debt and cover associated transaction costs. Investors should view this as a proactive step by AT&T to ensure sufficient liquidity and flexibility to close the significant Time Warner acquisition.

Key Highlights

  • 1Amendment to a $10 billion Term Loan Credit Agreement.
  • 2Tranche A Commitment increased from $5 billion to $8.0875 billion.
  • 3Tranche B Commitment increased from $5 billion to $8.0875 billion.
  • 4Commitment Termination Date extended to December 31, 2018.
  • 5Proceeds are intended to finance the Time Warner merger, including cash consideration and debt refinancing.
  • 6The amendment signals AT&T's continued preparation and funding strategy for the Time Warner acquisition.
  • 7The increased credit lines provide enhanced financial flexibility for the company.

Frequently Asked Questions

The main purpose of this 8-K filing is to report a material amendment to AT&T's existing credit agreement, specifically to increase the available borrowing amounts and extend the termination date of credit lines that are earmarked for financing the acquisition of Time Warner Inc.

The amendment significantly increases the potential borrowing capacity under the specific Tranche A and Tranche B commitments within the Term Loan Credit Agreement. Each tranche's commitment was raised from $5 billion to approximately $8.0875 billion, providing AT&T with greater access to funds if needed for the Time Warner transaction.

Extending the Commitment Termination Date to December 31, 2018, provides AT&T with additional time to draw upon these credit facilities. This is crucial given the ongoing regulatory review and timeline for closing the Time Warner merger, ensuring funding remains available throughout the process.

This filing reports an amendment to an existing credit agreement, increasing the *potential* borrowing capacity. The debt is not yet incurred; it will be drawn upon as needed to finance the Time Warner acquisition. The actual addition to the balance sheet will occur when AT&T borrows funds under this amended agreement.