Summary
AT&T Inc. (T) has announced the entry into a $12.0 billion Amended and Restated Credit Agreement, replacing its previous $7.5 billion facility. This new agreement, effective November 18, 2022, and maturing on November 18, 2027, provides AT&T with significant liquidity for general corporate purposes. The increased credit line offers enhanced financial flexibility and demonstrates the company's access to capital markets. The new credit agreement introduces a tiered interest rate structure based on AT&T's unsecured long-term debt ratings, with rates varying for USD, EUR, and Sterling advances. A key covenant includes a net debt-to-EBITDA ratio not to exceed 3.75 to 1, which is crucial for maintaining compliance and favorable borrowing costs. The company's current ratings from S&P, Moody's, and Fitch place it at specific margin and fee levels, though these are subject to change.
Key Highlights
- 1AT&T entered into a $12.0 billion Amended and Restated Credit Agreement, increasing its available revolving credit from $7.5 billion.
- 2The new credit facility matures on November 18, 2027, providing five years of access to funds.
- 3Advances under the agreement are for general corporate purposes, offering flexibility for strategic initiatives or operational needs.
- 4Interest rates are variable and linked to benchmarks like Term SOFR, EURIBOR, or SONIA, plus an applicable margin that adjusts based on AT&T's unsecured long-term debt ratings.
- 5A key financial covenant requires AT&T to maintain a net debt-to-EBITDA ratio of not more than 3.75 to 1.
- 6The agreement includes provisions for extending commitments and increasing the total commitment amount up to $14 billion.
- 7The previous $7.5 billion credit agreement dated December 11, 2018, was terminated in connection with entering the new agreement.