In case you’re wondering where the funds are going to come from to blaze the the AT&T and T-mobile USA acquisition, J.P. Morgan has agreed to put up $20 billion. According to reports, this will be the banks largest loan, ever. Stipulations include that the loan is an 18-month commitment for a one-year, unsecured bridge loan that AT&T can use to fund the deal. Further terms of the deal haven’t been made public.
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“This should encourage boards and companies and CEOs it’s OK to go through acquisitions,” the person familiar said. “The money is there and it’s attractive money.”
This giant loan by J.P. Morgan could be used as a selling point to companies searching for financing and investment banking. In other words, big companies who want to borrow big, may just get what they want because big lending, isn’t out of the question. A yes from regulators and the iron triangle theory becomes transparent.
Full story via WSJ Online