
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
UK Business Secretary Calls for More Agile Competition Regulator
Feb 13, 2025 by
CPI
Germany’s Antitrust Regulator Raises Concerns Over Apple’s App Tracking Policies
Feb 13, 2025 by
CPI
$60 Billion Nissan-Honda Merger Falls Apart
Feb 13, 2025 by
CPI
DOJ Moves to End Protections for Three Regulatory Agencies
Feb 13, 2025 by
CPI
Meta to Allow Rivals to List Ads on Facebook Marketplace Following EU Fine
Feb 13, 2025 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – International Criminal Enforcement
Jan 23, 2025 by
CPI
The Antitrust Division’s Recent Work to Combat International Cartels
Jan 23, 2025 by
Emma Burnham & Benjamin Christenson
Information Sharing: The New Frontier of U.S. Antitrust Enforcement
Jan 23, 2025 by
Brian P. Quinn, Casey Kovarik & Michael Tubach
The Key Role of Guidelines on Exchanges of Information Among Competitors and the Divergent Transatlantic Paths
Jan 23, 2025 by
Rosa Abrantes-Metz & Albert Metz
Leniency, Whistleblowers, and Compliance
Jan 23, 2025 by
Richard Powers, Tara O’Malley & Cory Gordon