The funds will be structured as a 364-day delayed-draw term loan due on January 27, Bloomberg reported, citing sources.
When AT&T draws the loan, it may have to pay a spread of 1 percentage point over the London interbank offered rate, based on early discussions, the news service reported.
AT&T will also have to pay an up-front fee of 0.05 percentage point once the transaction closes, as well as a 0.1 point facility fee, according to Tuesday's report.
A spokeswoman for the Dallas telecom giant declined comment on what she called a "speculative report." She also said the company was observing a quiet period ahead of earnings on Jan. 27.
AT&T shares at last check were down 0.5% to $28.72.
The auction for 5G airwaves could determine which company leads the next generation of telecommunications in the U.S., with consumers expected to flock to the faster mobile alternative.
The government auction that allocates spectrum still has several rounds of bidding ahead, with total revenue moving to about $81 billion, well ahead of analyst estimates of $47 billion, according to Bloomberg.
Earlier this month AT&T shares were upgraded by analysts at Raymond James with the firm bullish on the company's financials despite its financial commitments to expanding its broadband.
"We believe the situation improves for AT&T over the next 12 months, offering a solid total return story," Raymond James analyst Frank Louthan said.
"AT&T is expected to generate "more than enough free cash flow to cover its upcoming C-Band commitments; 2) keep leverage in check; and 3) maintain the dividend at or above the current level." C-Band is spectrum to be used for 5G applications.