, Columnists
AT&T's Mega-Deal Debt Disruptor
A mega-merger could have a big impact, depending on how it's financed.
This article is for subscribers only.
AT&T is officially acquiring entertainment-media giant Time Warner, at a price of $108.7 billion including net debt. The goal here sort of makes sense: AT&T has the distribution network and it wants the content of Time Warner, parent of HBO, CNN and TBS.
But AT&T's debt may balloon to levels that would put it at risk of a downgrade. That's a significant concern for both AT&T, the second-largest U.S. wireless carrier, and the broader $8 trillion corporate-bond market, considering that this company already had more than $120 billion of debt outstanding.