Filed at 8:44 p.m. ET
NEW YORK (Reuters) - AT&T Corp.(T.N) on Monday said it had completed the initial phases of three separate financing initiatives, including a bank credit facility of up to $4 billion that paves the way for the spinoff of AT&T Broadband.
The No. 1 U.S. long distance and cable television company needs the $4 billion facility to avoid default on a separate $8 billion facility when it completes its sale of AT&T Broadband to Comcast Corp. (CMCSA.O) (CMCSK.O) .
The new arrangement will let AT&T retire the $8 billion facility, a covenant of which bars the telecommunications giant from spinning off its broadband unit at it current debt rating, which was cut two notches in May.
A spokesman also said AT&T had cut its short-term debt and did not need access to the full $8 billion any more.
The company said it had received initial commitments from Citigroup Inc.(C.N) unit Citibank, Credit Suisse Group Inc's (CSGZn.VX) Credit Suisse First Boston, Goldman Sachs (GS.N) and J.P. Morgan (JPM.N) for a significant portion of a new bank facility of up to $4 billion.
The lenders include some of the banks which advised on the AT&T-Comcast on the deal, including Credit Suisse First Boston, Goldman Sachs and J.P. Morgan Chase.
The banks arranging the facility have also agreed to act as lead arrangers to syndicate the balance of the 364-day credit facility.
The AT&T spokesman declined to comment on rates his company would pay on the new facility or on the $8 billion one, which expires in December.
Moody's Investors Service slashed AT&T debt to two notches above ``junk'' status on May 29, saying the company would be challenged to boost revenue amid rising competition for its core business.
Financing irregularities uncovered at competitor WorldCom has also pressured rivals' debt.
The company is counting on cutting its total debt of around $34.4 billion, net of cash and monetization, to somewhere in the mid-teen-billions following the broadband unit spinoff, the spokesman said.
Additionally, AT&T said it renewed its Business Services customer accounts receivable securitization facility, which will provide up to $1.64 billion of financing. The company also said it expects to renew its Consumer Services customer accounts receivable securitization facility, under which about $200 million is currently drawn.
Finally, AT&T also said the Securities and Exchange Commission approved the company's filing to register the $7 billion of U.S. dollar-denominated notes issued in November 2001.
Shares of AT&T fell 67 cents, or 6.26 percent, to $10.03 on the New York Stock Exchange on Monday.
