Summary
AT&T Inc. has entered into two significant credit agreements to bolster its financial flexibility. First, the company has amended and restated its existing credit facility, establishing a new $12.0 billion Second Amended and Restated Credit Agreement. This revolving credit facility is available for general corporate purposes and offers interest rate options based on either a variable base rate or benchmark rates like Term SOFR, EURIBOR, and SONIA, with applicable margins tied to the company's senior unsecured long-term debt ratings. The facility has a termination date of November 3, 2030, with provisions for extensions and potential increases in commitment amounts up to $14 billion. Second, AT&T has secured a $17.5 billion Delayed Draw Term Loan Credit Agreement, which is split into a $6.0 billion 364-day facility and an $11.5 billion two-year facility. These term loans are available for a single draw by November 3, 2026, and will be used for general corporate purposes, potentially including spectrum acquisitions. Both credit agreements include standard covenants, such as limitations on liens and a net debt-to-EBITDA ratio of not more than 3.75 to 1, along with typical events of default that could lead to accelerated repayment or increased interest rates.
Key Highlights
- 1AT&T has secured a new $12.0 billion Revolving Credit Agreement and a $17.5 billion Delayed Draw Term Loan Credit Agreement, totaling $29.5 billion in new and amended credit facilities.
- 2The Revolving Credit Agreement is set to mature on November 3, 2030, offering flexibility for general corporate purposes with variable interest rates tied to benchmark rates and credit ratings.
- 3The Delayed Draw Term Loan is divided into a $6.0 billion 364-day facility and an $11.5 billion two-year facility, available for draw until November 3, 2026, and intended for general corporate uses including potential spectrum acquisitions.
- 4Both credit agreements include covenants requiring AT&T to maintain a net debt-to-EBITDA ratio of no more than 3.75 to 1, beginning in the first fiscal quarter of 2026.
- 5Interest rates on both facilities are variable and depend on the company's senior unsecured long-term debt ratings, with specific margins and fees detailed for different rating tiers.
- 6The credit agreements contain standard events of default that could trigger acceleration of debt or increased interest rates, including non-payment, breach of covenants, and cross-acceleration provisions tied to other significant debt obligations.
- 7The company's current credit ratings (BBB by S&P, Baa2 by Moody's, BBB+ by Fitch) determine the initial applicable margins and facility fees.