JPMorgan (JPM) Flexes Muscles in AT&T (T) Loan Deal

While the size of the loan as measured by other takeovers isn't that big of a deal, JPMorgan (NYSE:JPM) has definitely made a statement as to their confidence in themselves and the market, as well as AT&T (NYSE:T), with the $20 billion in financing provided to AT&T for their bid for T-Mobile USA from Deutsche Telekom AG.

The loan will cover about half of AT&T's surprise $39 billion acquisition attempt of T-Mobile USA from Deutsche Telekom AG. JPMorgan is also advising AT&T in an investment-banking capacity. The acquisition, which still must clear regulatory reviews, could create the largest wireless company in the U.S.

If the loan is completed with J.P. Morgan as the sole lender, it would represent the largest single-bank loan funding a takeover deal in history.

A person familiar with the loan, one of the biggest ever single-bank-led financings for a takeover, said the deal would show J.P. Morgan was "open for business" and that banks have the ability and willingness to make loans.

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.

While other bank financings have been bigger, most this size would require multiple lenders syndicating the loan. Such a large loan coming from one institution signals J.P. Morgan's muscular lending ability and its confidence in the capital markets and in the borrower.

JPMorgan was trading at $45.51, down $0.23, or 0.50 percent, as of 1:20 PM EDT.




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