Telstra Forced To Borrow Millions Due To COVID-19
Telstra who were facing problems prior to COVID-19 due to falling smartphone sales and limited 5G services has been forced to go onto a borrowing spree due to the epidemic.
Earlier today the Company announced that they are issuing $780 million dollars’ worth of bonds and adding to a nearly $1 billion extension of its bank borrowing facilities.
The forced lockdown of millions of Australians has seen broadband and network demand soar with Telstra seen as being in a position to benefit from the epidemic.
The 10-year investment grade bonds will fund general corporate purposes including upcoming debt maturities.
The telco has also extended its bank facility by $940 million, bringing its total committed bank facilities $3.6 billion.
Chief executive Andy Penn said both the bond issuance and bank facilities were “well below Telstra’s current average cost of funds”.
He said both demonstrated the company’s “financial strength and attractiveness to global capital markets, while further strengthening its strong liquidity position during a volatile period in global financial markets”.
Telstra shares have been on a downward spiral for more than 12 months and were today trading at $3.175 some analysts see the Company as an attractive proposition for investors in a world where lower-risk investments are slim pickings.
Recently Telstra moved to employ 1000 temporary workers to mann call centres after their overseas call centre in the Philippines was closed down overnight, they have also brought forward $500 million of capital expenditure.