AT&T and Comcast plan to exchange up to $11.8 billion in debt in order to facilitate the merger of Comcast and AT&T Broadband. The merger is expected to finalized by Q4.
The exchange of debt is expected to involve two types of transactions. The first transaction will involve the exchange of a series of AT&T notes for new notes that will become obligations of the company’s cable TV unit. AT&T Comcast plans to guarantee these obligations after the completion of the merger. The new notes will reduce the amount that AT&T Broadband would have to pay its parent company following the completion of the merger. The second transaction will involve a refinancing of existing debt. The transaction will see an exchange of AT&T notes for new notes that would remain obligations of AT&T.
AT&T agreed to sell its broadband division in December of last year. The merger will lead to the creation of an organization with a customer base of 22 million people, which is likely to be a market leader within its industry.