AT&T gives early tender tally in exchange offers for 46 note series

By Susanna Moon

Chicago, Nov. 16 – AT&T Inc. gave the early results of the private exchange offers for 46 series of notes as of 5 p.m. ET on Nov. 15.

The two private exchange offers for 46 note series will remain open until 11:59 p.m. ET on Nov. 28. The offers began Oct. 30. The early deadline was extended from 5 p.m. ET on Nov. 13.

In the maturity extension exchange offer, under pool 1 the company is offering the new series of senior notes due 2028 in exchange for 11 series of outstanding notes. AT&T will accept an amount of notes that results in the issuance of no more than $4 billion of new 2028 notes.

In pool 2 of the maturity extension exchange offer, the company is offering the new series of senior notes due 2030, 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 $4 billion of new 2030 notes.

The spread over the benchmark security for new 2028 notes being offered under pool 1 of the company’s maturity extension exchange offers was revised to 175 basis points, as announced Nov. 13. The spread for new 2030 notes being offered under pool 2 of the maturity extension offers was changed to 195 bps.

In a second series of offers, the OpCo and AT&T offers, AT&T is offering to exchange 21 series of notes issued by its wholly owned subsidiaries for new notes of the same tenor and interest amount and cash for a new series of notes due 2046 issued by AT&T. Additionally, seven series of notes issued by AT&T are also eligible to be exchanged for the new 2046 notes.

The spread for new 2046 notes being offered under an OpCo offer and an AT&T offer is 240 bps.

Pricing was scheduled for 11 a.m. ET on Nov. 16, extended from 11 a.m. ET on Nov. 14.

Pool 1 offer

The early tenders for the pool 1 offer are as follows with the notes listed in acceptance priority level, according to a company update on Thursday:

• $310,428,000 of AT&T’s $1,430,300,000 of 5% global notes due 2021;

• $29,608,000 of DirecTV Holdings LLC/DirecTV Financing Co., Inc.’s $69.5 million of 5% senior notes due 2021;

• $245,334,000 of AT&T’s $928.1 million of 4.6% global notes due 2021;

• $34,004,000 of DirecTV’s $71,879,000 of 4.6% senior notes due 2021;

• $396,601,000 of AT&T’s $1.25 billion of 4.45% global notes due 2021;

• $327,552,000 of AT&T’s $1.5 billion of 3.875% global notes due 2021;

• $262,531,000 of AT&T’s $1,154,200,000 of 5.2% global notes due 2020;

• $88,741,000 of DirecTV’s $145.7 million of 5.2% senior notes due 2020;

• $303,386,000 of AT&T’s $2 billion of 2.8% global notes due 2021;

• $245,989,000 of AT&T’s $3 billion of 2.45% global notes due 2020; and

• $63,281,000 of AT&T’s $750 million of floating-rate global notes due 2020.

The total payment for the floating-rate notes due 2020 is $1,020 per $1,000 of notes, including an early participation payment of $50 of new notes.

Pricing for the 5.2% notes and the 4.25% notes will be set using the 1.625% Treasury due Oct. 15, 2020, or the three-year Treasury, plus 15 bps for the 5.2% notes and 10 bps for the 2.45% notes.

Pricing for the remaining notes will be set using the 2% Treasury due Oct. 31, 2022, or the five-year Treasury, plus a spread of 15 bps for the 5% notes, 10 bps for the 4.6% and 2.8% notes, 20 bps for the 4.5% notes and 25 bps for the 3.875% notes.

Pool 2 offer

The early tenders for the pool 2 offer are as follows with the notes listed in acceptance priority level:

• $437 million of AT&T’s $1,029,000,000 of 0% global notes due 2022;

• $401,475,000 of AT&T’s $1,414,800,000 of 3.8% global notes due 2022;

• $19,943,000 of DirecTV’s $85 million of 3.8% senior notes due 2022;

• $709,784,000 of AT&T’s $2.6 billion of 3.6% global notes due 2023;

• $390,872,000 of AT&T’s $1.85 billion of 3% global notes due February 2022;

• $788.33 million of AT&T’s $2.75 billion of 3% global notes due June 2022; and

• $379,794,000 of AT&T’s $1.5 billion of 2.625% global notes due 2022.

Pricing for all series of pool 2 notes will be set using the five-year Treasury plus a spread of 80 bps for the 0% notes, 40 bps for the 3.8% notes, 70 bps for the 3.6% notes, 35 bps for the 3% notes due February 2022 and 45 bps for the 3% notes due June 2022 and the 2.625% notes.

In each of the pool 1 and pool 2 offers, an early participation payment of $50 of new notes will be paid per $1,000 of notes tendered by the early participation date.

Each of the pool 1 and pool 2 offers is subject to a condition that $500 million of new notes would have to be issued under the respective offer.

OpCo notes

In the OpCo offers, the notes may be exchanged for notes issued by AT&T with a like coupon and tenor as the existing series for a total value of $1,000 of new notes and $1.00 in cash per $1,000 of exchanged notes. In each case the total amount includes $50 of new notes for each $1,000 principal amount of notes tendered for exchange by the early date.

These notes are also may be exchanged for notes due 2046 issued by AT&T.

The early tenders for the OpCo notes in exchange for new senior notes to be issued by AT&T are as follows:

• $85,856,000 of BellSouth, LLC’s $262 million of 7.12% debentures due July 15, 2097;

• $32.05 million of BellSouth Telecommunications, LLC’s $105 million of 6.65% zero-to-full debentures due Dec. 15, 2095;

• $45,534,000 of BellSouth Telecommunications’ $142 million of 7% debentures due Dec. 1, 2095;

• $379,000 of BellSouth Telecommunications’ $87 million of 5.85% debentures due Nov. 15, 2045;

• $8.04 million of Ameritech Capital Funding Corp.’s $11,589,000 of 5.95% debentures due Jan. 15, 2038;

• $71,342,000 of BellSouth, LLC’s $316,485,000 of 6% debentures due 2034;

• $143,801,000 of BellSouth LLC’s $343,356,000 of 6.55% notes due 2034;

• $148.73 million of AT&T Mobility LLC’s $509,890,000 of 7.125% senior notes due 2031;

• $217,786,000 of AT&T Corp.’s $520.57 million of 8.25% senior notes due Nov. 15, 2031;

• $169,287,000 of BellSouth LLC’s $324,797,000 of 6.875% notes due 2031;

• $216,393,000 of New Cingular Wireless Services, Inc.’s $822,103,000 of 8.75% senior notes due 2031;

• $201,852,000 of BellSouth LLC’s $359,881,000 of 7.875% debentures due 2030;

• $6.82 million of AT&T Corp.’s $137,634,000 of 6.5% notes due 2029;

• $95,418,000 of BellSouth Telecommunications’ $333.55 million of 6.375% debentures due June 1, 2028;

• $114,586,000 of Ameritech Capital Funding’s $257,612,000 of 6.55% debentures due Jan. 15, 2028;

• $11,001,000 of Ameritech Capital Funding’s $67,413,000 of 6.875% debentures due 2027;

• $15,000 of BellSouth LLC’s $4,295,000 of 6.04% debentures due Nov. 15, 2026;

• $21.27 million of Indiana Bell Telephone Co., Inc.’s $83,316,000 of 7.3% debentures due Aug. 15, 2026;

• $257.2 million of Pacific Bell Telephone Co.’s $625 million of 7.125% debentures due March 15, 2026;

• $55,006,000 of BellSouth Telecommunications’ $167,718,000 of 7% debentures due Oct. 1, 2025; and

• $83,184,000 of Michigan Bell Telephone Co.’s $200 million of 7.85% debentures due Jan. 15, 2022.

More OpCo results

The early tenders for the OpCo notes in exchange for new senior notes due 2046 to be issued by AT&T are as follows:

• $86,501,000 of BellSouth, LLC’s $262,288,000 of 7.12% debentures due July 15, 2097;

• $31,375,000 of BellSouth Telecommunications, LLC’s $105,009,000 of 6.65% zero-to-full debentures due Dec. 15, 2095;

• $19,516,000 of BellSouth Telecommunications’ $142.32 million of 7% debentures due Dec. 1, 2095;

• $34,134,000 of BellSouth Telecommunications’ $86,995,000 of 5.85% debentures due Nov. 15, 2045;

• None of Ameritech Capital Funding Corp.’s $11,589,000 of 5.95% debentures due Jan. 15, 2038;

• $17,749,000 of BellSouth, LLC’s $316,485,000 of 6% debentures due 2034;

• $42,545,000 of BellSouth LLC’s $343,356,000 of 6.55% notes due 2034;

• $70,045,000 of AT&T Mobility LLC’s $509.89 million of 7.125% senior notes due 2031;

• $98.8 million of AT&T Corp.’s $520.57 million of 8.25% senior notes due Nov. 15, 2031;

• $29,678,000 of BellSouth LLC’s $324,797,000 of 6.875% notes due 2031;

• $146,211,000 of New Cingular Wireless Services, Inc.’s $822,103,000 of 8.75% senior notes due 2031;

• $36.55 million of BellSouth LLC’s $359,881,000 of 7.875% debentures due 2030;

• $9,875,000 of AT&T Corp.’s $137,634,000 of 6.5% notes due 2029;

• $22,334,000 of BellSouth Telecommunications’ $333.55 million of 6.375% debentures due June 1, 2028;

• $38,821,000 of Ameritech Capital Funding’s $257,612,000 of 6.55% debentures due Jan. 15, 2028;

• $13,033,000 of Ameritech Capital Funding’s $67,413,000 of 6.875% debentures due 2027;

• None of BellSouth LLC’s $4,295,000 of 6.04% debentures due Nov. 15, 2026;

• $33,983,000 of Indiana Bell Telephone Co., Inc.’s $83,316,000 of 7.3% debentures due Aug. 15, 2026;

• $87,983,000 of Pacific Bell Telephone Co.’s $625 million of 7.125% debentures due March 15, 2026;

• $7,145,000 of BellSouth Telecommunications’ $167,718,000 of 7% debentures due Oct. 1, 2025; and

• $14,016,000 of Michigan Bell Telephone Co.’s $200 million of 7.85% debentures due Jan. 15, 2022.

Pricing will be set using the 30-year 3% U.S. Treasury note due May 15, 2047, the 30-year Treasury, plus a spread of 90 bps for the 7.12% BellSouth debentures, the 6.65% BellSouth Telecommunications zero-to-full debentures and the BellSouth Telecommunications’ 7% debentures.

The spread atop the 30-year Treasury will be 230 bps for the 5.85% BellSouth Telecommunications debentures, 205 bps for the Ameritech Capital 5.95% debentures and 195 bps for the 6% and 6.55% BellSouth debentures.

Pricing for the Michigan Bell 7.85% debentures will be based on the five-year 2% U.S. Treasury note due Oct. 31, 2022 plus 100 bps.

Pricing for all other series will be based on the 10-year 2.25% U.S. Treasury note due Aug. 15, 2027 plus 100 bps.

The spread will be 180 bps for the 7.125% AT&T Mobility notes, the 8.25% and 6.5% AT&T Corp. notes, the 6.375% Bell South Telecom debentures and the 6.55% and 6.875% Ameritech Capital debentures.

The spread will be 200 bps for the 6.875% BellSouth notes.

It will be 185 bps for the New Cingular 9.75% notes, 195 bps for the BellSouth 7.875% debentures, 175 bps for the BellSouth 6.04% debentures, 170 bps for the Indiana Bell 7.3% debentures, 135 bps for the Pacific Bell 7.125% debentures and 140 bps for the BellSouth Telecommunications 7% debentures.

AT&T offer

The following notes issued by AT&T are eligible to be exchanged for 2046 notes:

• $260,481,000 of the $770,544,000 of 6.55% global notes due 2039;

• $32,316,000 of the $261,352,000 of 6.4% global notes due 2038;

• $215,284,000 of the $1,064,659,000 of 6.3% global notes due 2038;

• $245,667,000 of the $657,765,000 of 6.5% global notes due 2037;

• $21,645,000 of the $149,975,000 of 6.8% notes due 2036;

• $63,958,000 of the $420,058,000 of 6.15% global notes due 2034; and

• $60,621,000 of the $313,177,000 of 6.45% global notes due 2034.

These notes may be exchanged for notes due 2046 issued by AT&T with pricing in each case to be based on the 30-year Treasury plus a spread. The spread is 195 bps for the 6.55%, 6.4% and 6.3% notes; 190 bps for the 6.5% notes; 185 bps for the 6.8% notes; and 180 bps for the 6.15% and 6.45% notes.

In connection with the OpCo and AT&T exchange offers, AT&T is also soliciting consents from holders of the OpCo notes to eliminate substantially all of the restrictive covenants in the indentures governing the OpCo notes. If the proposed amendments to the OpCo indentures are adopted, all OpCo notes not tendered or not accepted for exchange will be governed by amended indentures, which will have less restrictive terms.

The consent solicitations will expire at 11:59 p.m. ET on Nov. 28.

The offers for new 2046 notes require that at least $500 million of the new notes would be issued.

The offers are being made under Rule 144A and Regulation S.

The exchange agent and information agent is Global Bondholders Services Corp. (866 470-3900, 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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