(Bloomberg) — AT&T Inc. is kicking off a bond sale that may help finance the acquisition of spectrum licenses, as mobile carriers borrow billions of dollars for such spending that could weaken their credit metrics.
The company is selling bonds in as many as four parts, according to a person with knowledge of the matter. The longest portion of the offering, a five-year security, may yield about 110 basis points above Treasuries, said the person, who asked not to be identified as the details are private.
AT&T, the most-indebted U.S. non-financial company, will use the proceeds from the sale for general corporate purpose, including buying spectrum licenses, the person said.
This sale comes after Verizon Communications Inc. sold $25 billion of bonds in nine parts to help finance purchases of 5G airwaves, making it the largest bond sale of 2021. T-Mobile US Inc. borrowed $3.8 billion earlier this week for similar purposes, adding to a wave of telecom issuance that has swept the market.
AT&T entered into a term loan for $14.7 billion earlier this year to support the acquisition of spectrum, after promising to spend up to $23 billion on such purchases in an auction run by the Federal Communications Commission beginning in December. Verizon was the highest bidder, committing $45 billion, and T-Mobile US Inc. was the third-highest bidder at $9.3 billion.
Barclays Plc, Citigroup Inc., JPMorgan Chase & Co. and Mizuho Financial Group Inc. are managing the sale, the person said.
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