T-Mobile, still planning to forge ahead with its merger with Sprint, has told a group of 16 banks to provide it with US$23 billion in loans to finalize things.
This would’ve been accomplished by selling the debt to private third-party investors, but the onset of the coronavirus stopped that from happening.
So T-Mobile notified the banks that the funds would need to be available on April 1, further complicating the banks’ already-strained systems as the virus sends financial markets into disarray.
Now, a number of banks including Barclays, Credit Suisse Group, Deutsche Bank, Goldman Sachs Group, Morgan Stanley, and Royal Bank of Canada will have to allot billions to let the two mobile networks merge into one entity. The banks will have to pay US$19 billion through a 364-day bridge loan, expected to be refinanced by investment-grade bonds. Another US$4 million will come via a seven-year term loan that will likely also be high-grade.
Sprint and T-Mobile are junk-rated, but the merger was concocted in a way so that the financing would receive investment-grade ratings, according to sources familiar with the deal. That has made it less of a risk than debt accrued by banks to finance leveraged buyouts for high-yield companies, but the hefty bill is the biggest to hit the banks since the 2008 financial crisis.
The problem for banks comes in the ongoing fiscal catastrophe of the coronavirus pandemic, which has seen mass layoffs and closures that have left millions without any financial security. The banks are already looking at the possibility of providing hundreds of billions of dollars in loans requested by various companies since March 9 when the crisis was starting to worsen in the US.
Full Content: PYMNTS
Want more news? Subscribe to CPI’s free daily newsletter for more headlines and updates on antitrust developments around the world.
Featured News
Pfizer Settles Remaining Effexor XR Antitrust Claims for $25.5 Million
Apr 29, 2024 by
CPI
South Korean Regulator Approves LG Uplus and Kakao Mobility EV Charging Venture
Apr 29, 2024 by
CPI
Federal Judge Dismisses Doctors’ Antitrust Suit Against Ohio Health System
Apr 29, 2024 by
CPI
Paramount CEO Bob Bakish Steps Down as Merger Inches Closer
Apr 29, 2024 by
CPI
EU Brands Apple’s iPadOS as Gatekeeper in Tech Crackdown
Apr 29, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Economics of Criminal Antitrust
Apr 19, 2024 by
CPI
Navigating Economic Expert Work in Criminal Antitrust Litigation
Apr 19, 2024 by
CPI
The Increased Importance of Economics in Cartel Cases
Apr 19, 2024 by
CPI
A Law and Economics Analysis of the Antitrust Treatment of Physician Collective Price Agreements
Apr 19, 2024 by
CPI
Information Exchange In Criminal Antitrust Cases: How Economic Testimony Can Tip The Scales
Apr 19, 2024 by
CPI