WarnerMedia Parent AT&T Takes Out $5.5 Billion Loan, Promises to Keep Paying Dividend

Company touts strength of cash position, balance sheet and liquidity

Last Updated: April 7, 2020 @ 7:32 AM

WarnerMedia parent company AT&T on Tuesday announced it has secured a $5.5 billion loan deal from 12 banks and maintained it has “a strong cash position, including a strong balance sheet and attractive liquidity” despite the economic downturn amid the coronavirus pandemic.

AT&T’s stock price had gone up 3%, to just over $30, in early morning trading immediately following the announcement, which included assurance that the quarterly dividend to shareholders will continue as it has for the last 36 years.

“The strength and relevance of our core subscription businesses, our continued execution on our business transformation initiatives, and sizing our operations to economic activity will provide cash from operations that will support network investments, dividend payments and debt retirement, as well as the ability to invest in business opportunities that arise as the economies recover,” the company said in the statement.

The company also noted that it expects to close the sale of its Puerto Rico and U.S. Virgin Islands operations later this year, and will use the proceeds from that sale to take care of any outstanding preferred interest. It also expects to receive $2 billion to close later in the year from the outstanding divestiture of CME, as well as real estate and tower monetizations.

The company noted that it had $12 billion in cash on hand at the end of 2019 and has a $15 billion revolver in place, which the company has no current plans to use this year.

AT&T also said there no cash funding requirements in the near term for its pension fund and does not expect any required contributions through 2022.

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