- Deutsche Telekom and T-Mobile US have agreed to further develop their financial relationship
Part of this agreement is a 3-year credit agreement (Revolving Credit Facility) of two tranches totaling USD 2.5 billion that Deutsche Telekom will provide to its U.S. subsidiary. USD 1.5 billion of this is secured. T-Mobile US can draw down the financing repeatedly and in varying amounts, up to the maximum amount of the credit lines.
The partially secured credit lines offer T-Mobile US a much more flexible and cost-effective liquidity reserve going forward, and makes it possible for the company to use previously unavailable cash reserves, since surplus liquidity can be used to repay high-interest debt.
The lines constitute a liquidity reserve, such that Deutsche Telekom does not have to borrow any additional long-term capital to provide it. Consequently, the Group's net debt will not be increased by this move.
In addition, Deutsche Telekom is providing T-Mobile US with a secured loan (Term-Loan B) of USD 660 million. This agreement demonstrates once again that Deutsche Telekom is prepared to be involved in the financing of T-Mobile US provided that this is also economically advantageous to Deutsche Telekom's shareholders.
Deutsche Telekom has sustainable balance sheet ratios and a comfortable liquidity reserve of some 12.9 billion euros that is currently undrawn. In addition, Deutsche Telekom has access to short-term and long-term debt capital markets.
Disclaimer
This media information contains forward-looking statements that reflect the current views of Deutsche Telekom management with respect to future events. They are generally identified by the words "expect," "anticipate," "believe," "intend," "estimate," "aim," "goal," "plan," "will," "seek," "outlook" or similar expressions and include generally any information that relates to expectations or targets for revenue, adjusted EBITDA, EBITDA, or other performance measures. Forward-looking statements are based on current plans, estimates, and projections. They should therefore be considered with caution. Such statements are subject to risks and uncertainties, most of which are difficult to predict and are generally beyond Deutsche Telekom's control. If these risks and uncertainties materialize, or if the assumptions underlying any of these statements prove incorrect, the actual results may be materially different from those expressed or implied by such statements. Deutsche Telekom can offer no assurance that its expectations or targets will be met. Without prejudice to existing obligations under capital market law, Deutsche Telekom does not assume any obligation to update forward-looking statements to account for new information or future events or anything else.
About Deutsche Telekom: Deutsche Telekom at a glance