AT&T to issue $4.5 billion 2048 notes, $2.5 billion 2049 notes in exchange for 21 note series

By Susanna Moon

Chicago, Sept. 2 – AT&T Inc. will issue $4,499,999,000 of new 2048 notes and $2.5 billion of new 2049 notes in the exchange for 21 series of notes.

The exchange ended at 11:59 p.m. ET on Sept. 1 and was divided into two parts, pool 1 and pool 2. The exchange began on Aug. 5.

In the pool 1 offer, the company was offering to issue up to $4.5 billion of senior notes due 2048 in exchange for nine series of outstanding notes.

AT&T previously amended the terms of the pool 1 offer to lift the maximum issue amount from $2.5 billion.

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

Pricing for the pool 1 notes was set as follows, along with the final tender tallies and the response levels by the early deadline:

• AT&T’s $406 million of 6.45% global notes due June 15, 2034 will be bought at $1,266.04 per $1,000 principal amount, and the company will issue $1,275.40 of new notes due 2048. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 200 bps. Holders tendered $92,778,000 of the notes, including $92,678,000 by the early deadline;

• AT&T’s $175.2 million of 6.8% notes due 2036 will be bought at $1,330.69 per $1,000 principal amount, and the company will issue $1,340.53 of new notes due 2048. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 200 bps. Holders tendered $25,271,000 of the notes, including $25,271,000 by the early deadline;

• AT&T’s $326.9 million of 6.4% global notes due 2038 will be bought at $1,278.60 per $1,000 principal amount, and the company will issue $1,288.05 of new notes due 2048. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 210 bps. Holders tendered $65,563,000 of the notes, including $65,553,000 by the early deadline;

• AT&T’s $586.3 million of 6.15% global notes due 2034 will be bought at $1,238.40 per $1,000 principal amount, and the company will issue $1,247.56 of new notes due 2048. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 195 bps. Holders tendered $166,196,000 of the notes, including $166,196,000 by the early deadline;

• AT&T’s $1,815,300,000 of 6.3% global notes due 2038 will be bought at $1,270.36 per $1,000 principal amount, and the company will issue $1,279.75 of new notes due 2048. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 205 bps. Holders tendered $750,616,000 of the notes, including $750,594,000 by the early deadline;

• AT&T’s $1,154,200,000 of 6.5% global notes due 2037 will be bought at $1,303.07 per $1,000 principal amount, and the company will issue $1,312.71 of new notes due 2048. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 200 bps. Holders tendered $496.44 million of the notes, including $493,896,000 by the early deadline;

• AT&T’s $1,437,300,000 of 6.55% global notes due 2039 will be bought at $1,314.18 per $1,000 principal amount, and the company will issue $1,323.90 of new notes due 2048. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 205 bps. Holders tendered $666,725,000 of the notes, including $664,955,000 by the early deadline;

• AT&T’s $2 billion of 5.55% global notes due 2041 will be bought at $1,179.13 per $1,000 principal amount, and the company will issue $1,187.85 of new notes due 2048. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 207 bps. Holders tendered $990,457,000 of the notes, including $990,427,000 by the early deadline; and

• AT&T Corp.’s $770.5 million of 8.25% senior notes due Nov. 15, 2031 will be bought at $1,533.09 per $1,000 principal amount and the company will issue $1,544.43 of new notes due 2048. Pricing was set using the 1.625% Treasury due May 15, 2026 plus a spread of 205 bps. Holders tendered $531,739,000 of the notes, including $531,639,000 by the early deadline.

The notes are listed in order of priority acceptance level.

AT&T accepted all of the tendered notes for the first eight series of the pool 1 notes and will exchange $249,919,000 of the 8.25% notes using a prorated factor of 47%, according to a company notice.

Pool 2 notes

Pricing for the pool 2 notes was set as follows, along with the final results and the response levels by the early deadline:

• BellSouth Telecommunications, LLC’s $145.6 million of 6.65% zero-to-full debentures due Dec. 15, 2095 will be bought at $1,275.41 per $1,000 principal amount, and the company will issue $1,278.43 of new notes due 2049. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 290 bps. Holders tendered $40,597,000 of the notes, including $40,597,000 by the early deadline;

• BellSouth, LLC’s $289.1 million of 7.12% debentures due July 15, 2097 will be bought at $1,364.85 per $1,000 principal amount, and the company will issue $1,368.08 of new notes due 2049. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 290 bps. Holders tendered $26,813,000 of the notes, including $26,813,000 by the early deadline;

• BellSouth Telecommunications’ $185.5 million of 7% debentures due Dec. 1, 2095 will be bought at $1,341.62 per $1,000 principal amount, and the company will issue $1,344.79 of new notes due 2049. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 290 bps. Holders tendered $43,199,000 of the notes, including $43,199,000 by the early deadline;

• BellSouth’s $366.2 million of 6.55% notes due 2034 will be bought at $1,221.96 per $1,000 principal amount, and the company will issue $1,169.23 of new notes due 2049 and pay $55.49 in cash. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 240 bps. Holders tendered $22,832,000 of the notes, including $22,832,000 by the early deadline;

• BellSouth’s $360.6 million of 6% notes due 2034 will be bought at $1,158.60 per $1,000 principal amount, and the company will issue $1,137.40 of new notes due 2049 and pay $23.78 in cash. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 240 bps. Holders tendered $44,126,000 of the notes, including $43,126,000 by the early deadline;

• BellSouth’s $505.7 million of 7.875% debentures due 2030 will be bought at $1,393.77 per $1,000 principal amount, and the company will issue $1,397.07 of new notes due 2049. Pricing was set using the 1.625% Treasury due May 15, 2026 plus a spread of 245 bps. Holders tendered $145,806,000 of the notes, including $145,806,000 by the early deadline;

• BellSouth’s $403.7 million of 6.875% notes due 2031 will be bought at $1,310.54 per $1,000 principal amount, and the company will issue $1,313.64 of new notes due 2049. Pricing was set using the 1.625% Treasury due May 15, 2026 plus a spread of 250 bps. Holders tendered $78,861,000 of the notes, including $78,861,000 by the early deadline;

• AT&T’s $3.5 billion of 5.35% global notes due 2040 will be bought at $1,148.95 per $1,000 principal amount, and the company will issue $1,151.67 of new notes due 2049. Pricing was set using the 2.5% Treasury due May 15, 2046 plus a spread of 205 bps. Holders tendered $1,900,116,000 of the notes, including $1,899,933,000 by the early deadline;

• BellSouth Telecommunications’ $333.6 million of 6.375% debentures due June 1, 2028 will be bought at $1,247.58 per $1,000 principal amount, and the company will issue $1,250.53 of new notes due 2049. Pricing was set using the 1.625% Treasury due May 15, 2026 plus a spread of 215 bps. Holders tendered $41,798,000 of the notes, including $41,798,000 by the early deadline;

• Ameritech Capital Funding Corp.’s $257.6 million of 6.55% debentures due Jan. 15, 2028 will be bought at $1,262.56 per $1,000 principal amount, and the company will issue $1,265.55 of new notes due 2049. Pricing was set using the 1.625% Treasury due May 15, 2026 plus a spread of 210 bps. Holders tendered $19,901,000 of the notes, including $19,821,000 by the early deadline;

• New Cingular Wireless Services, Inc.’s $822.1 million of 8.75% senior notes due 2031 will be bought at $1,585.32 per $1,000 principal amount, and the company will issue $1,589.07 of new notes due 2049. Pricing was set using the 1.625% Treasury due May 15, 2026 plus a spread of 195 bps. Holders tendered $89,326,000 of the notes, including $88,770,000 by the early deadline; and

• AT&T Mobility LLC’s $509.9 million of 7.125% senior notes due 2031 will be bought at $1,419.03 per $1,000 principal amount, and the company will issue $1,422.39 of new notes due 2049. Pricing was set using the 1.625% Treasury due May 15, 2026 plus a spread of 195 bps. Holders tendered $79,966,000 of the notes, including $79,341,000 by the early deadline.

The notes are listed in order of priority acceptance level.

The company accepted for exchange all of the tendered notes for the first seven series of the pool 2 notes; $1,710,440,000 of the 5.35% notes with a priority acceptance level of 8 using a proration factor of 90%; and none of the other pool 2 notes with priority levels of 9 through 12.

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

The exchange offers were 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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