JP Morgan's $20bn AT&T loan a 'credit negative': Moody's

JPMorgan Chase & Co's decision to be the sole underwriter on a USD 20 billion bridge loan to AT&T Inc is a "credit negative," according to Moody's Investors Service.

JPMorgan is the only bank making the initial 18-month commitment for a one-year, USD 20 billion unsecured bridge loan to help finance AT&T Inc's acquisition of T-Mobile USA from Deutsche Telekom AG.

A bridge loan is a high interest rate loan that provides short-term financing.

"We believe JPM's USD 20 billion commitment is credit negative, as it highlights JPM's increased appetite for risk," analyst Sean Jones wrote on Monday.

"If this translates into giving the bank an advantage in winning the mandate to underwrite AT&T's long-term bond issuances to pay off the bridge facility, then it may encourage more banks to take on greater single-risk exposure, which would be credit negative for the industry, including JPM."

JPMorgan declined comment.

Shares of JPMorgan closed up 0.22% at USD 45.96.