AT&T has jumped into a $9.2 billion credit agreement that includes a $6.3 billion and a $2.87 billion term loan facility. The carrier also entered into a $2 billion 18-month credit agreement with Mizuho Bank.
According to an SEC filing, AT&T will use the funds for general corporate purposes including “acquisition related expenses” should advances be made under either agreement.
AT&T is currently pursuing a $48.5 billion acquisition of DirecTV. But as a Wall Street Journal report points out, the carrier could also soon be on the hook for some big ticket spectrum purchases.
AT&T is actively bidding in the FCC’s ongoing AWS-3 spectrum auction, which has seen its revenue from total bids already climbed close to $45 billion. Analysts have estimated Verizon, AT&T’s biggest rival in the proceedings, may have spent up to $25 billion in the auction.
AT&T, which like Verizon is likely after 20 MHz of the 65 MHz of AWS-3 spectrum currently up for grabs, may be looking at a similar tab once the auction ends. Craig Moffett of Moffett Nathanson estimates AT&T may have spent $16 billion in the AWS-3 auction.
The smashing success of the AWS-3 auction comes as the FCC’s 600 MHz broadcaster incentive auctions have been pushed back to 2016. Early revenue estimates for the 600 MHz forward auction were set around $45 billion.
But considering the high prices in the AWS-3 auction, it could be reasonable to expect that the available 600 MHz spectrum, which has better propagation characteristics than AWS, could fetch a higher sum.
AT&T had originally earmarked $9 billion for bidding in the incentive auctions. But the carrier’s new round of credit agreements could result in a bigger war chest when the 600 MHz auction finally begins.