AT&T borrowed $5.5 billion to boost its short-term cash flow, but reassured investors its business remains strong despite pressure related to the Covid-19 (coronavirus) pandemic.
The operator noted in a filing to the Securities and Exchange Commission the money will be used for “general corporate purposes,” and must be repaid by 31 December. Financing was provided by a dozen banks, including Bank of America, CitiBank and Goldman Sachs.
In a related press release it said the loan will supplement the nearly $12 billion cash on hand it had at 31 December 2019, providing “additional financial flexibility” during the crisis.
AT&T was forced to close a large portion [1] of its retail stores in response to the pandemic in March and, along with several other US operators, pledged not to disconnect customers due to non-payment during the pandemic.
Looking ahead, the operator said it expects its core subscription businesses and cost-reduction efforts [2] will yield enough cash to sustain continued network investments, dividend and debt payments, and investments in new opportunities as the economy recovers.
The company also highlighted strength in its supply chain, noting it expects “limited” exposure to near-term equipment shortages.
Further details about the pandemic’s impact on the operator are expected to be revealed when it reports Q1 earnings on 22 April.
[1] https://www.mobileworldlive.com/blog/covid-19-industry-impact-february-to-march/
[2] https://www.mobileworldlive.com/featured-content/top-three/att-refocuses-cost-reduction-targets/
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