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| 27 | AT&T looks to borrow $14B for 5G spectrum – report | ----------- | |
| FierceWireless: Wireless | 2021-01-14 04:00 | ????0? | |
| Bank of America is leading the transaction for what Bloomberg, citing sources with knowledge of the matter, says is a 364-day delayed-draw term loan, with commitments due on January 2. The report noted that the structure would allow for AT&T to wait until the cash is needed and likely refinance in the bond market within a year.“If T-Mobile spends less than we expect, Verizon or AT&T will likely account for the shortfall,” wrote New Street analyst Jonathan Chaplin in a note to investors Monday. “Neither company has the cash on hand to cover what we expect them to spend in the auction at present; we would expect more debt issuance for the group in coming weeks.”The C-band auction is the only near-term opportunity for carriers to acquire mid-band frequencies that are in the sweet spot for both coverage and capacity. Right before the auction kicked off MoffettNathanson analysts pointed to the importance saying “Who ‘wins’ the C-Band auction will shape the competitive dynamics of 5G for a decade.”But as prices have climbed, that definition of “winning” has shifted for some, and Moffett in recent weeks pointed out that higher spectrum prices don’t translate to greater-than expected revenues. As a follow-up the firm put out a separate note Monday that drew parallels between the C-band auction and 3G auctions in Europe in 2000 where operators overpaid for spectrum and were left with huge debt burdens that had long-term impacts.“To be fair, the valuation backdrop is very different today. Verizon and AT&T are trading at just half the market multiple; no one can argue that they are subject to the extravagant expectations that burdened the European industry twenty years ago. Moreover, the magnitude of the current C-Band auction relative to industry cash flow pales in comparison,” wrote analyst Craig Moffett. -- ???????? | |||
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