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JP Morgan Scheduling Talks to Syndicate Bridge Loan

Tuesday, 22 Mar 2011 | 12:02 PM ET

Just two days after JP Morgan lent AT&T $20 billion to help cement its plan to purchase Deutsche Telekom’s T-Mobile unit, JP Morgan is already scheduling meetings with other banks to discuss syndicating the loan, say people familiar with the matter.

Those meetings, according to one person whose bank was approached by JP Morgan , could occur as early as this week. But another person familiar with the matter said that while the meetings with other financial institutions are likely to occur “in the coming weeks,” nothing imminent has yet been scheduled.

JPMorgan's Bridge Loan to AT&T
The Strategy Session team discuss the $20B loan from JPMorgan to AT&T, with Peter Boockvar, Miller Tabak managing director.

The syndication efforts signal that despite JP Morgan’s large balance sheet and resultant lending capacity, the bank may be acting quickly to parcel out some of the risk associated with its $20 billion loan to AT&T .

Intended to help the wireless giant execute its $39 billion cash-and-stock deal for T-Mobile, JP Morgan’s $20 billion loan is a bridge, or temporary financing facility, that will kick in if and when the deal closes, according to people familiar with the deal’s terms. The bridge will be available for 18 months, say these people, and once it is drawn upon, its term will be 12 months.

In addition to being AT&T’s lender in the deal, JP Morgan is also the company’s financial advisor, alongside the boutique banking firms Evercore Partners and Greenhill & Co..

Using just one commercial bank was crucial, people involved with the deal have said, in order to help assure confidentiality during the negotiation process.


Watch Kate Kelly weekdays at Noon ET on CNBC's "The Strategy Session."

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