Is AT&T's Large Debt a Recession Risk?
Most investors own U.S. telecom giant AT&T (NYSE: T) for its large dividend that yields 6%. But should investors worry about whether the company can afford that payout when times get tough? A recession can squeeze consumers, and rising interest rates are prohibitive for companies with a lot of debt. Borrowing or refinancing becomes very expensive.
I'll break down the company's debt load to see how much debt is due in the coming years, and determine whether a recession is a cause for worry or if it's just hot air.
AT&T had quite a journey over the past decade, acquiring DirecTV and Time Warner to build pay television and streaming businesses. These were huge deals worth tens of billions of dollars, and AT&T funded them using a lot of debt. The company's since abandoned its entertainment projects and is back to functioning as a pure-telecommunications business.
Source Fool.com
