By Susanna Moon
Chicago, Nov. 29 – AT&T Inc. gave the results of two private exchange offers for 46 series of notes that ended at 11:59 p.m. ET on Nov. 28.
In exchange, AT&T expects to issue $2,449,011,000 principal amount of new 2028 notes and $3,156,272,000 principal amount of new 2030 notes plus accrued interest, according to a company announcement.
As previously announced, the yield on the 2028 notes will be 4.117%, and the issue price will be $998.65, set using the bid-side yield on the 2.25% Treasury due Aug. 15, 2027, which was 2.367%, plus 175 basis points.
The yield on the 2030 notes will be 4.317%, and the issue price will be $998.46, set using the bid-side yield on the 2.25% Treasury due Aug. 15, 2027 plus 195 bps.
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 bps, 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.
The yield on the 2046 notes will be 5.192%, and the issue price will be $993.77, set using the bid-side yield on the 3% Treasury due May 15, 2047, which was 2.792%, plus 240 bps.
The exchange offers began on Oct. 30 with an early deadline of 5 p.m. ET on Nov. 15, extended from 5 p.m. ET on Nov. 13.
In the maturity extension exchange offer, under pool 1 the company was offering new series of senior notes due 2028 in exchange for 11 series of outstanding notes. AT&T previously said it would accept an amount of notes that results in the issuance of no more than $4 billion of new 2028 notes.
AT&T said it expects to accept tenders for all of the pool 1 notes with acceptance priority levels 1 through 11.
In pool 2 of the maturity extension exchange offer, the company was offering the new series of senior notes due 2030, in exchange for seven series of outstanding notes. AT&T previously said it would accept an amount of notes that results in the issuance of no more than $4 billion of new 2030 notes.
For the pool 2 notes, the company will accept all of the notes with acceptance priority levels 1 through 7.
In connection with the OpCo and AT&T exchange offers, AT&T also obtained consents from holders of the OpCo notes to eliminate substantially all of the restrictive covenants in the indentures governing the OpCo notes
The consent solicitations ended at 11:59 p.m. ET on Nov. 28.
Pool 1 offer
The tender breakdown for the pool 1 offer is as follows with the notes listed in acceptance priority levels and pricing for each $1,000 principal amount:
• $310,428,000, including $310,428,000 early tenders, of AT&T’s $1,430,300,000 of 5% global notes due 2021 with a total purchase price of $1,086.93 with $1,088.40 of new notes;
• $29,608,000, including $29,608,000 early tenders, of the DirecTV Holdings LLC/DirecTV Financing Co., Inc.’s $69.5 million of 5% senior notes due 2021 with a total purchase price of $1,086.93 paid in $1,088.40 of new notes;
• $245,359,000, including $245,334,000 early tenders, of AT&T’s $928.1 million of 4.6% global notes due 2021 with a total purchase price of $1,069.44 paid in $1,070.89 of new notes;
• $34,004,000, including $34,004,000 early tenders, of DirecTV’s $71,879,000 of 4.6% senior notes due 2021 with a total purchase price of $1,069.44 paid in $1,070.89 of new notes;
• $396,841,000, including $396,601,000 early tenders, of AT&T’s $1.25 billion of 4.45% global notes due 2021 with a total purchase price of $1,072.33 paid in $1,073.78 of new notes;
• $328,395,000, including $327,552,000 early tenders, of AT&T’s $1.5 billion of 3.875% global notes due 2021 with a total purchase price of $1,055.17 paid in $1,056.60 of new notes;
• $264,031,000, including $262,531,000 early tenders, of AT&T’s $1,154,200,000 of 5.2% global notes due 2020 with a total purchase price of $1,071.94 paid in $1,073.39 of new notes;
• $88,741,000, including $88,741,000 early tenders, of DirecTV’s $145.7 million of 5.2% senior notes due 2020 with a total purchase price of $1,071.94 paid in $1,073.39 of new notes;
• $305,001,000, including $303,386,000 early tenders, of AT&T’s $2 billion of 2.8% global notes due 2021 with a total purchase price of $1,019.19 paid in $1,020.57 of new notes;
• $249,559,000, including $245,989,000 early tenders, of AT&T’s $3 billion of 2.45% global notes due 2020 with a total purchase price of $1,012.89 paid in $1,014.26 of new notes; and
• $63,281,000, including $63,281,000 early tenders, of AT&T’s $750 million of floating-rate global notes due 2020 with a total purchase price of $1,020.00 paid in $1,021.38 of new notes.
Pool 2 offer
The tenders for the pool 2 offer are as follows with the notes listed in acceptance priority level and pricing for each $1,000 principal amount:
• $437 million, including $437 million early tenders, of AT&T’s $1,029,000,000 of 0% global notes due 2022 with a total purchase price of $867.82 paid in $869.16 of new notes;
• $402,785,000, including $401,475,000 early tenders, of AT&T’s $1,414,800,000 of 3.8% global notes due 2022 with a total purchase price of $1,054.12 paid in $1,055.75 of new notes;
• $19,973,000, including $19,943,000 early tenders, of DirecTV’s $85 million of 3.8% senior notes due 2022 with a total purchase price of $1,054.12 paid in $1,055.75 of new notes;
• $709,939,000, including $709,784,000 early tenders, of AT&T’s $2.6 billion of 3.6% global notes due 2023 with a total purchase price of $1,039.20 paid in $1,040.80 of new notes;
• $393,166,000, including $390,872,000 early tenders, of AT&T’s $1.85 billion of 3% global notes due February 2022 with a total purchase price of $1,023.36 paid in $1,024.94 of new notes;
• $788,486,000, including $788.33 million early tenders, of AT&T’s $2.75 billion of 3% global notes due June 2022 with a total purchase price of $1,021.84 paid in $1,006.60 of new notes; and
• $381,257,000, including $379,794,000 early tenders, of AT&T’s $1.5 billion of 2.625% global notes due 2022 with a total purchase price of $1,005.05 paid in $1,006.60 of new notes.
Pricing for the pool 2 notes was 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 $50.00 of new notes will be paid per $1,000 of notes tendered by the early participation date.
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 also may be exchanged for notes due 2046 issued by AT&T.
The tenders for the OpCo notes in exchange for new senior notes to be issued by AT&T are as follows:
• $85,856,000, including $85,856,000 early tenders, of BellSouth, LLC’s $262 million of 7.12% debentures due July 15, 2097;
• $32.05 million, including $32.05 million early tenders, of BellSouth Telecommunications, LLC’s $105 million of 6.65% zero-to-full debentures due Dec. 15, 2095;
• $45,534,000, including $45,534,000 early tenders, of BellSouth Telecommunications’ $142 million of 7% debentures due Dec. 1, 2095;
• $379,000, including $379,000 early tenders, of BellSouth Telecommunications’ $87 million of 5.85% debentures due Nov. 15, 2045;
• $8.04 million, including $8.04 million early tenders, of Ameritech Capital Funding Corp.’s $11,589,000 of 5.95% debentures due Jan. 15, 2038;
• $71,392,000, including $71,342,000 early tenders, of BellSouth, LLC’s $316,485,000 of 6% debentures due 2034;
• $143,801,000, including $143,801,000 early tenders, of BellSouth LLC’s $343,356,000 of 6.55% notes due 2034;
• $148.73 million, including $148.73 million early tenders, of AT&T Mobility LLC’s $509.89 million of 7.125% senior notes due 2031;
• $217,786,000, including $217,786,000 early tenders, of AT&T Corp.’s $520.57 million of 8.25% senior notes due Nov. 15, 2031;
• $169,287,000, including $169,287,000 early tenders, of BellSouth LLC’s $324,797,000 of 6.875% notes due 2031;
• $216,393,000, including $216,393,000 early tenders, of New Cingular Wireless Services, Inc.’s $822,103,000 of 8.75% senior notes due 2031;
• $201,852,000, including $201,852,000 early tenders, of BellSouth LLC’s $359,881,000 of 7.875% debentures due 2030;
• $6.82 million, including $6.82 million early tenders, of AT&T Corp.’s $137,634,000 of 6.5% notes due 2029;
• $95,418,000, including $95,418,000 early tenders, of BellSouth Telecommunications’ $333.55 million of 6.375% debentures due June 1, 2028;
• $114,586,000, including $114,586,000 early tenders, of Ameritech Capital Funding’s $257,612,000 of 6.55% debentures due Jan. 15, 2028;
• $11,001,000, including $11,001,000 early tenders, of Ameritech Capital Funding’s $67,413,000 of 6.875% debentures due 2027;
• $15,000, including $15,000 early tenders, of BellSouth LLC’s $4,295,000 of 6.04% debentures due Nov. 15, 2026;
• $21.27 million, including $21.27 million early tenders, of Indiana Bell Telephone Co., Inc.’s $83,316,000 of 7.3% debentures due Aug. 15, 2026;
• $257.2 million, including $257.2 million early tenders, of Pacific Bell Telephone Co.’s $625 million of 7.125% debentures due March 15, 2026;
• $55,006,000, including $55,006,000 early tenders, of BellSouth Telecommunications’ $167,718,000 of 7% debentures due Oct. 1, 2025; and
• $83,184,000, including $83,184,000 early tenders, of Michigan Bell Telephone Co.’s $200 million of 7.85% debentures due Jan. 15, 2022.
None of BellSouth’s 6.04% debentures were accepted. All of the other tenders were accepted for purchase, the company said Wednesday.
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 with pricing for each $1,000 principal amount:
• $86,501,000, including $86,501,000 early tenders, of BellSouth, LLC’s $262,288,000 of 7.12% debentures due July 15, 2097 for $1,247.9;
• $31,375,000, including $31,375,000 early tenders, of BellSouth Telecommunications, LLC’s $105,009,000 of 6.65% zero-to-full debentures due Dec. 15, 2095 for $1,166.16;
• $19,516,000, including $19,516,000 early tenders, of BellSouth Telecommunications’ $142.32 million of 7% debentures due Dec. 1, 2095 for $1,122.691;
• $34,134,000, including $34,134,000 early tenders, of BellSouth Telecommunications’ $86,995,000 of 5.85% debentures due Nov. 15, 2045 for $1,112.33;
• None of Ameritech Capital Funding Corp.’s $11,589,000 of 5.95% debentures due Jan. 15, 2038 for $1,141.38;
• $17,749,000, including $17,749,000 early tenders, of BellSouth, LLC’s $316,485,000 of 6% debentures due 2034 for $1,145.42;
• $42,545,000, including $42,545,000 early tenders, of BellSouth LLC’s $343,356,000 of 6.55% notes due 2034 for $1,205.61;
• $70,045,000, including $70,045,000 early tenders, of AT&T Mobility LLC’s $509.89 million of 7.125% senior notes due 2031 for $1,311.98;
• $98.8 million, including $98.8 million early tenders, of AT&T Corp.’s $520.57 million of 8.25% senior notes due Nov. 15, 2031 for $1,428.75;
• $29,678,000, including $29,678,000 early tenders, of BellSouth LLC’s $324,797,000 of 6.875% notes due 2031 for $1,258.82;
• $146,211,000, including $146,211,000 early tenders, of New Cingular Wireless Services, Inc.’s $822,103,000 of 8.75% senior notes due 2031 for $1,456.46;
• $36.55 million, including $36.55 million early tenders, of BellSouth LLC’s $359,881,000 of 7.875% debentures due 2030 for $1,334.73;
• $9,875,000, including $9,875,000 early tenders, of AT&T Corp.’s $137,634,000 of 6.5% notes due 2029 for $1,208.32;
• $22,334,000, including $22,334,000 early tenders, of BellSouth Telecommunications’ $333.55 million of 6.375% debentures due June 1, 2028 for $1,186.23;
• $38,821,000, including $38,821,000 early tenders, of Ameritech Capital Funding’s $257,612,000 of 6.55% debentures due Jan. 15, 2028 for $1,195.11;
• $13,033,000, including $13,033,000 early tenders, of Ameritech Capital Funding’s $67,413,000 of 6.875% debentures due 2027 for $1,217.28;
• None of BellSouth LLC’s $4,295,000 of 6.04% debentures due Nov. 15, 2026 for $1,142.80;
• $33,983,000, including $33,983,000 early tenders, of Indiana Bell Telephone Co., Inc.’s $83,316,000 of 7.3% debentures due Aug. 15, 2026 for $1,234.95;
• $87,983,000, including $87,983,000 early tenders, of Pacific Bell Telephone Co.’s $625 million of 7.125% debentures due March 15, 2026 for $1,241.13;
• $7,145,000, including $7,145,000 early tenders, of BellSouth Telecommunications’ $167,718,000 of 7% debentures due Oct. 1, 2025 with total purchase price of for $1,217.48; and
• $14,016,000, including $14,016,000 early tenders, of Michigan Bell Telephone Co.’s $200 million of 7.85% debentures due Jan. 15, 2022 with total purchase price of for $1,184.05.
AT&T offer
The tenders for notes issued by AT&T to be exchanged for 2046 notes are as follows with total purchase prices, with $1,006.27 of new notes to be issued in each case and the amount over par to be paid in cash:
• $260,481,000, including $260,481,000 early tenders, of the $770,544,000 of 6.55% global notes due 2039 for $1,240.05;
• $32,316,000, including $32,316,000 early tenders, of the $261,352,000 of 6.4% global notes due 2038 for $1,215.56;
• $215,299,000, including $215,284,000 early tenders, of the $1,064,659,000 of 6.3% global notes due 2038 for $1,200.54;
• $245,667,000, including $245,667,000 early tenders, of the $657,765,000 of 6.5% global notes due 2037 for $1,231.06;
• $21,645,000, including $21,645,000 early tenders, of the $149,975,000 of 6.8% notes due 2036 for $1,265.54;
• $63,983,000, including $63,958,000 early tenders, of the $420,058,000 of 6.15% global notes due 2034 for $1,180.88; and
• $60,641,000, including $60,621,000 early tenders, of the $313,177,000 of 6.45% global notes due 2034 for $1,213.63.
These notes were exchanged for notes due 2046 issued by AT&T with pricing in each case 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.
The yield on the 2046 notes will be 5.192%, and the issue price will be $993.77, set using the bid-side yield on the 3% Treasury due May 15, 2047, which was 2.792%, plus 240 bps.
Pricing details
In the pool 1 offer, pricing for the 5.2% notes and the 4.25% notes was set using the 1.625% Treasury due Oct. 15, 2020, or the three-year Treasury, for a reference yield of 1.819% plus 15 bps for the 5.2% notes and 10 bps for the 2.45% notes.
Pricing for the remaining notes was set using the 2% Treasury due Oct. 31, 2022, or the five-year Treasury, for a yield of 2,062%, 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.
Pricing for the pool 2 notes was 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, the total amount includes an early participation payment of $50 of new notes that 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.
For the OpCo notes, pricing was set using the 30-year 3% U.S. Treasury note due May 15, 2047, the 30-year Treasury, for a reference yield of 2.792% 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 was 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 was based on the five-year 2% U.S. Treasury note due Oct. 31, 2022 plus 100 bps.
Pricing for all other series was based on the 10-year 2.25% U.S. Treasury note due Aug. 15, 2027 plus 100 bps.
The spread was 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 was 200 bps for the 6.875% BellSouth notes.
It was 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.
For the AT&T notes, pricing was based on the 30-year Treasury plus a spread. The spread was 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.
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.
New notes
| Issuer: | AT&T Inc.
|
| Issue: | Notes
|
| Pricing date: | Nov. 16
|
| Settlement date: | Dec. 1
|
|
|
| 2028 notes
|
| Amount: | $2,449,011,000
|
| Maturity: | 2028
|
| Price: | 99.865
|
| Yield: | 4.117%
|
| Reference security: | 2.25% Treasury due Aug. 15, 2027
|
| Spread: | 175 bps
|
|
|
| 2030 notes
|
| Amount: | $3,156,272,000
|
| Maturity: | 2030
|
| Price: | 99.846
|
| Yield: | 4.317%
|
| Reference security: | 2.25% Treasury due Aug. 15, 2027
|
| Spread: | 195 bps
|
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