AT&T announces pricing, early results of exchange offers for 42 series

By Taylor Fox

New York, Sept. 15 – AT&T Inc. announced the early results and pricing terms with of its private offers to exchange 42 series of notes, according to a news release.

As announced on Aug. 31, the offers are divided into three pools.

Under pool 1 the company is offering cash and a new series of 3.5% senior notes due 2053 in exchange for 25 series of outstanding notes. AT&T will accept an amount of notes that results in the issuance of no more than $7.5 billion of new 2053 notes. The 2053 notes cap was increased from $5 billion.

In pool 2, the company is offering a new series of 3.55% senior notes due 2055 and cash in exchange for 10 series of outstanding notes. AT&T will accept an amount of notes that results in the issuance of no more than $7.5 billion of new 2055 notes. The 2055 notes cap was increased from $5 billion.

Under pool 3 the company is offering cash and a new series of 3.65% senior notes due 2059 in exchange for seven series of outstanding notes. AT&T will accept an amount of notes that results in the issuance of no more than $6.5 billion of new 2059 notes. The 2059 notes cap was increased from $5 billion.

For each pool, a minimum condition applies stipulating that, in order for an exchange to be consummated, holders must tender enough notes to result in the issuance of at least $1 billion of the new notes being offered under that pool.

The yield on the new 2053 notes will be 3.53%, and the new issue price will be $994.18, which was determined by reference to the bid-side yield on the 1.25% Treasury note due May 15, 2050, which was 1.43%, plus 2.1%.

The yield on the new 2055 notes will be 3.58%, and the new issue price will be $994.04, which was based on the bid-side yield on the 1.25% Treasury note due May 15, 2050, which was 1.43%, plus 2.15%.

The yield on the new 2059 will be 3.68%, and the new issue price will be $993.82, based on the bid-side yield on the 1.25% Treasury note due May 15, 2050, which was 1.43%, plus 2.25%.

Tenders may no longer be withdrawn as of the early deadline at 5 p.m. ET on Sept. 14.

The exchange offers will expire at 11:59 p.m. ET on Sept. 28.

Early settlement is expected on Sept. 18 and final settlement on Sept. 30.

Pricing was set at 11 a.m. ET on Sept. 15.

Pool 1 offers

As of the early deadline, holders had tendered the following notes, listed in order of acceptance priority level, under the pool 1 offers, with the total consideration per $1,000 principal amount of notes:

• $16,536,000 of New Cingular Wireless Services, Inc.’s $274,942,000 of 8.75% senior notes due 2031 (Cusip: 00209AAF3), with pricing set at $1,605.03, based on the 0.625% Treasury note due Aug. 15, 2030 plus 155 basis points and 40% of the premium to be paid in cash;

• $4,557,000 of AT&T Corp.’s $109,211,000 outstanding 8.75% senior notes due Nov. 15, 2031 (Cusip: 001957BD0, U03017BC0), with pricing set at $1,627.70, based on the 0.625% Treasury note due Aug. 15, 2030 plus 165 bps and 50% of the premium to be paid in cash;

• $15,000 of Historic TW Inc.’s $156,007,000 outstanding 8.3% discount debentures due 2036 (Cusip: 887315AZ2), with pricing set at $1,576.63, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 40% of the premium to be paid in cash;

• $29,000 of Time Warner’s $139,051,000 outstanding 7.7% debentures due 2032 (Cusip: 00184AAG0), with pricing set at $1,537.37, based on the 0.625% Treasury note due Aug. 15, 2030 plus 170 bps and 25% of the premium to be paid in cash;

• $139,000 of Time Warner’s $155,466,000 outstanding 7.625% debentures due 2031 (Cusip: 00184AAC9), with pricing set at $1,505.84, based on the 0.625% Treasury note due Aug. 15, 2030 plus 155 bps and 25% of the premium to be paid in cash;

• $235,000 of AT&T Mobility LLC’s $151,402,000 outstanding 7.125% senior notes due 2031 (Cusip: 17248RAJ5), with pricing set at $1,471.90, based on the 0.625% Treasury note due Aug. 15, 2030 plus 165 bps and 45% of the premium to be paid in cash;

• $1.59 million of BellSouth, LLC’s $113,757,000 outstanding 6.875% senior due 2031 (Cusip: 079860AD4), with pricing set at $1,441.50, based on the 0.625% Treasury note due Aug. 15, 2030 plus 165 bps and 40% of the premium to be paid in cash;

• $799,000 of BellSouth’s $147,409,000 outstanding 6.55% notes due 2034 (Cusip: 079860AE2), with pricing set at $1,464.26, based on the 0.625% Treasury note due Aug. 15, 2030 plus 185 bps and 25% of the premium to be paid in cash;

• $2,634,000 of BellSouth’s $201,055,000 outstanding 6% notes due 2034 (Cusip: 079860AK8), with pricing set at $1,403.58, based on the 0.625% Treasury note due Aug. 15, 2030 plus 190 bps and 25% of the premium to be paid in cash;

• $1,015,000 of AT&T Inc.’s $128.33 million outstanding 6.8% notes due 2036 (Cusip: 00206RAB8), with pricing set at $1,405.60, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 60% of the premium to be paid in cash;

• $66,925,000 of AT&T Inc.’s $510,063,000 outstanding 6.55% global notes due 2039 (Cusip: 00206RAS1) with pricing set at $1,466.82, based on the 1.25% Treasury note due May 15, 2050 plus 175 bps and 25% of the premium to be paid in cash;

• $4,274,000 of AT&T Inc.’s $160,252,000 outstanding 6.5% global notes due 2036 (Cusip: 00206RJC7), with pricing set at $1,378.35, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash;

• $172,847,000 of AT&T Inc.’s $412,098,000 outstanding 6.5% global notes due 2037 (Cusip: 00206RAD4), with pricing set at $1,449.01, based on the 1.25% Treasury note due May 15, 2050 plus 165 bps and 25% of the premium to be paid in cash;

• $64,018,000 of AT&T Inc.’s $229,036,000 outstanding 6.4% global notes due 2038 (Cusip: 00206RAN2), with pricing set at $1,440.97, based on the 1.25% Treasury note due May 15, 2050 plus 170 bps and 25% of the premium to be paid in cash;

• $332,905,000 of AT&T Inc.’s $490,483,000 outstanding 6.35% global notes due 2040 (Cusip: 00206RDE9), with pricing set at $1,448.68, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $99,983,000 of AT&T Inc.’s $849.36 million outstanding 6.3% global notes due 2038 (Cusip: 00206RAG7), with pricing set at $1,429.76, based on the 1.25% Treasury note due May 15, 2050 plus 165 bps and 25% of the premium to be paid in cash;

• $64,365,000 of AT&T Inc.’s $329,267,000 outstanding 6.2% global notes due 2040 (Cusip: 00206RJD5), with pricing set at $1,427.10, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $144,331,000 of AT&T Inc.’s $392,704,000 outstanding 6.1% global notes due 2040 (Cusip: 00206RJE3), with pricing set at $1,417.73, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $763,203,000 of AT&T Inc.’s $1,234,030,000 outstanding 6% global notes due 2040 (Cusip: 00206RDF6), with pricing set at $$1,400.79, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $720,248,000 of AT&T Inc.’s $1,789,560,000 outstanding 5.35% global notes due 2040 (Cusip: 04650NAB0, U9475PAA6), with pricing set at $1,310.01, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $1,205,610,000 of AT&T Inc.’s $3 billion outstanding 5.25% global notes due 2037 (Cusip: 00206RDR0), with pricing set at $1,279.17, based on the 1.25% Treasury note due May 15, 2050 plus 160 bps and 25% of the premium to be paid in cash;

• $595,718,000 of AT&T Inc.’s $1,278,679,000 outstanding 4.9% global notes due 2037 (Cusip: 00206RFW7, U04644CJ4), with pricing set at $1,240.31, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $1,043,764,000 of AT&T Inc.’s $2 billion outstanding 4.85% global notes due 2039 (Cusip: 00206RHK1), with pricing set at $1,242.68, based on the 1.25% Treasury note due May 15, 2050 plus 165 bps and 25% of the premium to be paid in cash;

• $1,303,859,000 of AT&T Inc.’s $2.5 billion outstanding 4.8% global notes due 2044 (Cusip: 00206RCG5), with pricing set at $1,236.50, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash; and

• $559.95 million of AT&T Inc.’s $1,956,149,000 outstanding 4.3% global notes due 2042 (Cusip: 00206RBH4, 00206RBG6), with pricing set at $1,149.18, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash.

Based on the amount of old notes tendered, AT&T expects to accept tenders of all the top 23 priority series of pool 1 notes tendered by the early deadline and to accept 4.8% global notes due 2044 subject to a proration factor of approximately 57.57%.

The cash payment percent of the premium is the percent of the amount by which the total consideration exceeds $1,000 in principal amount and cash per $1,000 principal amount of old notes.

In each case, there will be an early participation payment for series in the pool 1 offers equal to $50 principal amount of new 2053 notes.

Pool 2 offers

As of the early deadline, holders had tendered the following notes, listed in order of acceptance priority level, under the pool 2 offers, with the total consideration per $1,000 principal amount of notes:

• $379,856,000 of AT&T Inc.’s $984,108,000 outstanding 6.375% global notes due 2041 (Cusip: 00206RDG4), with pricing set at $1,499.03, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $191,405,000 of AT&T Inc.’s $521,724,000 outstanding 6.25% global notes due 2041 (Cusip: 00206RJF0), with pricing set at $1,431.75, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $333,392,000 of AT&T Inc.’s $1,009,543,000 outstanding 5.55% global notes due 2041 (Cusip: 00206RBA9), with pricing set at $$1,332.42, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $260.61 million of AT&T Inc.’s $447,305,000 outstanding 5.375% global notes due 2041 (Cusip: 00206RJG8), with pricing set at $1,307.91, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $244,857,000 of AT&T Inc.’s $436,339,000 outstanding 5.35% global notes due 2043 (Cusip: 00206RJJ2), with pricing set at $1,325, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $618,319,000 of AT&T Inc.’s $1,208,505,000 outstanding 5.15% global notes due 2042 (Cusip: 00206RDH2), with pricing set at $1,277.78, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $1,007,433,000 of AT&T Inc.’s $1,750,725,000 outstanding 5.15% global notes due 2046 (Cusip: 00206RHA3, 00206RFM9 and U04644BX4), with pricing set at $1,302.03, based on the 1.25% Treasury note due May 15, 2050 plus 195 bps and 25% of the premium to be paid in cash;

• $394,633,000 of AT&T Inc.’s $795,686,000 outstanding 4.85% global notes due 2045 (Cusip: 00206RJL7), with pricing set at $1,252, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $1,628,202,000 of AT&T Inc.’s $3.5 billion outstanding 4.75% global notes due 2046 (Cusip: 00206RCQ3), with pricing set at $1,230.87, based on the 1.25% Treasury note due May 15, 2050 plus 195 bps and 25% of the premium to be paid in cash; and

• $1,548,464,000 of AT&T Inc.’s $3,043,850,000 outstanding 4.35% global notes due 2045 (Cusip: 00206RBK7, U04644AE7), with pricing set at $1,168.71, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash.

The cash payment percent of the premium is the percent of the amount by which the total consideration exceeds $1,000 in principal amount and cash per $1,000 principal amount of old notes.

In each case, there will be an early participation payment for series in the pool 2 offers equal to $50 principal amount of new 2055 notes.

AT&T expects to accept all pool 2 notes tendered from the top nine priority levels of pool 2 notes. It expects to accept 4.35% global notes due 2045 at a proration factor of approximately 74.15%,

Pool 3 offers

As of the early deadline, holders had tendered the following notes, listed in order of acceptance priority level, under the pool 3 offers, with the total consideration per $1,000 principal amount of notes:

• $514,799,000 of AT&T Inc.’s $1 billion outstanding 5.7% global notes due 2057 (Cusip: 00206RDT6), with pricing set at $1,413.78, based on the 1.25% Treasury note due May 15, 2050 plus 220 bps and 60% of the premium to be paid in cash;

• $540,565,000 of AT&T Inc.’s $1.5 billion outstanding 5.65% global notes due 2047 (Cusip: 00206RCU4), with pricing set at $1,379.04, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash;

• $1,251,477,000 of AT&T Inc.’s $2 billion outstanding 5.45% global notes due 2047 (Cusip: 00206RDS8), with pricing set at $1,345.27, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash;

• $461,929,000 of AT&T Inc.’s $643,744,000 outstanding 5.3% global notes due 2058 (Cusip: 00206RFS6, U04644CG0), with pricing set at $1,340.23, based on the 1.25% Treasury note due May 15, 2050 plus 220 bps and 25% of the premium to be paid in cash;

• $753,335,000 of AT&T Inc.’s $1,694,666,000 outstanding 5.15% global notes due 2050 (Cusip: 00206RFU1), with pricing set at $1,302.83, based on the 1.25% Treasury note due May 15, 2050 plus 205 bps and 25% of the premium to be paid in cash;

• $1,569,246,000 of AT&T Inc.’s $2.5 billion outstanding 4.55% global notes due 2049 (Cusip: 00206RDM1, 00206RDK5), with pricing set at $1,200.42, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash; and

• $2,240,736,000 of AT&T Inc.’s $4,499,999,000 outstanding 4.5% global notes due 2048 (Cusip: 00206RDL3, 00206RDJ8) with pricing set at $1,187.30, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash.

AT&T expects to accept all notes tendered from the top six priority levels of pool 3 notes. It expects to accept 4.5% global notes due 2048 at a proration factor of approximately 14.47%.

The cash payment percent of the premium is the percent of the amount by which the total consideration exceeds $1,000 in principal amount and cash per $1,000 principal amount of old notes.

In each case, there will be an early participation payment for series in the pool 3 offers equal to $50 principal amount of new 2059 notes.

Holders will receive accrued interest in cash.

AT&T had said it expects the dealer managers selected will include 22 minority-, disabled veteran-, and women-owned brokerage firms.

The exchange agent and information agent is Global Bondholders Services Corp. (866 470-3900, 212 430-3774 or contact@gbsc-usa.com).

AT&T is a telecommunications services provider based in Dallas.

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