AT&T gives early results in exchange for 21 series, upsizes one offer

By Susanna Moon

Chicago, Aug. 19 – AT&T Inc. announced the early tender results in the exchange for 21 series of notes as of 5 p.m. ET on Aug. 18, the early tender date.

The company began the exchange on Aug. 5, divided into offers for two separate pools of notes.

In the pool 1 offer, the company was offering to issue up to $2.5 billion of senior notes due 2048 in exchange for nine series of outstanding notes.

AT&T amended the terms of the pool 1 offer on Friday to lift the maximum issue amount to $4.5 billion, according to a company press release.

In the pool 2 offer, the company will issue up to $2.5 billion of senior notes due 2049 and cash in exchange for 12 series of outstanding notes. The pool 2 offer remains unchanged.

The exchange offers will continue until 11:59 p.m. ET on Sept. 1.

Tendered notes may no longer be withdrawn as of the early deadline.

Pool 1 offer

For the pool 1 offer, investors had tendered the following amounts as of the early deadline, with the notes listed in order of acceptance priority level:

• $92,678,000 of AT&T’s $406 million of 6.45% global notes due June 15, 2034;

• $25,271,000 of AT&T’s $175.2 million of 6.8% notes due 2036;

• $65,553,000 of AT&T’s $326.9 million of 6.4% global notes due 2038;

• $166,196,000 of AT&T’s $586.3 million of 6.15% global notes due 2034;

• $750,594,000 of AT&T’s $1,815,300,000 of 6.3% global notes due 2038;

• $493,896,000 of AT&T’s $1,154,200,000 of 6.5% global notes due 2037;

• $664,955,000 of AT&T’s $1,437,300,000 of 6.55% global notes due 2039;

• $990,427,000 of AT&T’s $2 billion of 5.55% global notes due 2041; and

• $531,639,000 of AT&T Corp.’s $770.5 million of 8.25% senior notes due Nov. 15, 2031.

Pricing for the 8.25% notes will be set using the 1.625% Treasury due May 15, 2026 plus 205 basis points. For the other notes, the purchase price will be calculated using the 2.5% Treasury due May 15, 2046 plus a spread of 200 bps for the 6.45% notes and 6.8% notes, 210 bps for the 6.4% notes, 195 bps for the 6.15% notes, 205 bps for the 6.3% notes, 200 bps for the 6.5% notes, 205 bps for the 6.55% notes and 207 bps for the 5.55% notes.

Pool 2 offer

The early tender count is as follows for the pool 2 offer, with the notes listed in order of acceptance priority level:

• $40,597,000 of BellSouth Telecommunications, LLC’s $145.6 million of 6.65% zero-to-full debentures due Dec. 15, 2095;

• $26,813,000 of BellSouth, LLC’s $289.1 million of 7.12% debentures due July 15, 2097;

• $43,199,000 of BellSouth Telecommunications’ $185.5 million of 7% debentures due Dec. 1, 2095;

• $22,832,000 of BellSouth’s $366.2 million of 6.55% notes due 2034;

• $43,126,000 of BellSouth’s $360.6 million of 6% notes due 2034;

• $145,806,000 of BellSouth’s $505.7 million of 7.875% debentures due 2030;

• $78,861,000 of BellSouth’s $403.7 million of 6.875% notes due 2031;

• $1,899,933,000 of AT&T’s $3.5 billion of 5.35% global notes due 2040;

• $41,798,000 of BellSouth Telecommunications’ $333.6 million of 6.375% debentures due June 1, 2028;

• $19,821,000 of Ameritech Capital Funding Corp.’s $257.6 million of 6.55% debentures due Jan. 15, 2028;

• $88,770,000 of New Cingular Wireless Services, Inc.’s $822.1 million of 8.75% senior notes due 2031; and

• $79,341,000 of AT&T Mobility LLC’s $509.9 million of 7.125% senior notes due 2031.

Pricing will be set using the 30-year Treasury plus a spread of 290 bps for the 7.12% debentures, 7% debentures and 6.55% notes; the 30-year Treasury plus 240 bps for the 6.55% notes and 6% notes; the 10-year Treasury plus 245 bps for the 7.875% debentures; the 10-year Treasury plus 250 bps for the 6.875% notes; the 30-year Treasury plus 205 bps for the 5.35% global notes; the 10-year Treasury plus 215 bps for the 6.375% debentures; the 10-year Treasury plus 210 bps for the 6.55% debentures and the 10-year Treasury plus 195 bps for the 8.75% notes and 7.125% notes.

For the 6.55% notes and the 6% notes, there will be a cash payment premium of 25% and 15%, respectively.

The early premium will be for notes exchanged by 5 p.m. ET on Aug. 18.

Holders will also receive accrued interest up to but excluding the settlement date.

The exchange offers are contingent on a minimum of $500 million principal amount of new 2048 notes and $500 million principal amount of new 2049 notes being issued in the exchange.

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

AT&T, formerly known as SBC Communications Inc., is a telecommunications services provider based in Dallas.

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