Speculation is active, though not confirmed, that AT&T has a big move planned that will allow it to buy up a glut of 5G real estate. If proven to be true, AT&T may be campaigning to raise $14 billion to spend on the 5G spectrum. TheStreet.com explains how it believes AT&T would put the pieces in place to fund this purchase.
The thought is that AT&T is seeking to obtain a delayed term loan of $14 billion from a group of banks with extra fees and percentage points tacked on. While an AT&T spokesperson referred to the matter as a “speculative report,” a 0.5 percent dip in AT&T shares prior to an earnings statement scheduled for January 27 does suggest that the company has plans afoot to stay competitive with T-Mobile, according to the account.
T-Mobile recently borrowed $3 billion from the bond market to bolster its own investments in the 5G spectrum. The industry anticipates a healthy interest in the next round of 5G spectrum bidding, that has already outpaced predictions from analysts. Total revenue is projected to be approximately $81 billion, far ahead of the original $47 billion estimate.
“AT&T is expected to generate more than enough free cash flow to cover its upcoming C-band commitments; 2) keep leverage in check; and 3) maintain the dividend at or above the current level,” noted Raymond James analyst Frank Louthan. “We believe the situation improves for AT&T over the next 12 months, offering a solid total return story.”