WarnerMedia parent AT&T said Tuesday it is setting up a new $5.5 billion loan arrangement at reasonable rates with 12 banks to provide added financial stability to its "already powerful cash position."

Loans are pre-payable without interest, the company said, as it aims to convince the markets and workers that it is on stable ground during these shaky times.

The business said on its 1st quarter earnings call April 22 it would include more details on coronavirus impacts to its financial and operating performance. It will be the first major media group to post results and offer some specifics into the current quarter.

AT&T scrapped a $4 billion stock buyback it had scheduled for the second quarter on March 20, and stopped all repurchases of stocks as it tries to conserve cash. The telco, which operates WarnerMedia and DirecTV, also cautioned that the fallout from the ongoing pandemic could be "material" to its sales performance.

The latest loan adds to AT&T's huge $163 billion debt load, piled up in 2015 through its DirecTV acquisitions and in 2018 by Time Warner (now WarnerMedia).

With $12 billion in cash on hand, AT&T said it would be able to produce more cash by "sizing our operations to economic activity;" sometimes, reducing operations means layoffs.

AT&T's $85 billion buyout of Time Warner, and its legacy brands like Warner Bros. and HBO, has made the company one of the big entities in Hollywood. But with cinemas shut down, productions on hold and ad revenue plunging, this is not a good time to be in show business.

New WarnerMedia chief executive officer Jason Kilar will have his work cut out for him when he comes on in May. AT&T also noted that it has access to a completely committed $15 billion revolver loan already in place that it doesn't need or intend to draw on by 2020.  

AT&T is the first major media corporation to build out its cash reserve to protect against the pandemic's economic uncertainties and unknowns. Disney, Comcast, ViacomCBS and Fox between them collectively earned about $14 billion from debt securities sales.

Before the impact of the COVID-19 crisis, AT&T had embarked on a policy of selling off properties to pay down debt incurred by the Time Warner contract.

Last autumn, it announced an agreement to sell its majority stake in Central European Media Enterprises (CME), and said on Tuesday it intends to record about $2 billion when the CME transaction closes later in 2020.