Bank of America, Barclays Bank, and Citibank are leading a $1.1 billion revolving credit line for Sprint Corp.
The Kansas-based telecommunications company selected the three lenders earlier this month, effectively anointing them as its primary relationship banks.
Lauren Wright, Sprint's assistant treasurer, said the company held talks with a number of banks over the past year concerning its credit, cash management, and other banking needs.
With over $10 billion in annual revenues, Sprint is a plum client.
Existing Credit Lines Combined
The new three-year revolver consolidates three existing lines for Sprint and its recent merger partner, Centel Corp.
Sprint acquired Centel in March through an exchange of stock valued at $2.6 billion.
The new credit line would be used mainly as a backstop for the issuance of commercial paper and other short-term funding. Sprint expects to enter the commercial paper market if its debt is upgraded, Ms. Wright said.
Sprint's commercial paper is rated A3 by Standard & Poor's Corp. and P3 Moody's Investors Service.
Borrowers with a rating below A2/P2 generally have trouble gaining access to the commercial paper market. Sprint's senior debt rating is BBB-minus, which is the lowest investment-grade rating at Standard & Poor's.
Citibank was the sole agent for Sprint's existing $700 million revolver, which was put in place in 1989.
Last year, Barclays, Citi, and J.P. Morgan & Co. arranged a $600 million financing for Sprint, involving the securitization of the company's accounts receivable.
Morgan, which led one of Centel's existing credit lines, is expected to participate in Sprint's new revolver.
Syndication of the new $1.1 billion deal officially will get under way next month, at a bank meeting scheduled for June 9.
By then, over half of the credit is expected to be underwritten, according too a banker involved in the transaction.
The three managing agents underwrote a "substantial portion," and two co-agents are expected to commit soon, the banker added.
Pricing and other terms of the deal have not yet been disclosed. That information is expected to be sent to prospective syndicate members next week.