AT&T aims to exchange five note series with mandatory calls, tenders for the five same issues

By Susanna Moon

Chicago, Feb. 15 – AT&T Inc. began an exchange offer for five series of notes and a separate set of cash offers for retail holders, according to two separate releases attached to an 8-K filing with the Securities and Exchange Commission.

The exchange consists of five separate private offers to swap out notes that have a special mandatory redemption provision for five new series of AT&T’s senior notes that do not, according to a company announcement.

No consents are being solicited as part of the exchange offers and there is no overall minimum condition, although each exchange offer has a minimum condition for that series of notes.

The exchange offers will end at 5 p.m. ET on Feb. 22. Tenders may be withdrawn at any time before the end of the offers.

Settlement is expected to occur on Feb. 27.

AT&T is offering to issue new notes in exchange for the five series as follows:

• €1.25 billion of floating-rate global notes due Sept. 4, 2023 for new notes due Sept. 5, 2023 and €2.50 cash with a minimum exchange condition of €500 million;

• €750 million 1.05% global notes due Sept. 4, 2023 for new notes due Sept. 5, 2023 and €2.50 cash with a minimum exchange condition of €300 million;

• €1.75 billion 1.8% global notes due Sept. 4, 2026 for new notes due Sept. 5, 2026 and €2.50 cash with a minimum exchange condition of €500 million;

• €1.5 billion 2.35% global notes due Sept. 4, 2029 for new notes due Sept. 5, 2029 and €2.50 cash with a minimum exchange condition of €500 million; and

• £1 billion 3.55% global notes due Sept. 4, 2037 for new notes due Sept. 5, 2037 and £2.50 cash with a minimum exchange condition of £250 million.

The issuer is offering an exchange value of €1,000 for each €1,000 principal amount or £1,000 per £1,000 principal amount, respectively, which includes a cash fee of €2.50 or £2.50 per €1,000 or £1,000, respectively, the release noted.

No accrued interest will be paid on the old notes in connection with the exchange; however, interest on the new notes will accrue from the most recent interest payment date, with the exception of floaters due 2023, which will begin to accrue interest from March 5.

The exchange offers contain conditions including that the old notes are not subject to redemption under the terms of their SMR provision, the completion of the cash offers as well as the closing of the proposed acquisition of Time Warner Inc.

The exchange is being offered to holders who are qualified institutional buyers under Rule 144A or Regulation S.

Lucid Issuer Services Ltd. (+44 20 7704 0880 or https://www.lucid-is.com/att.) is the exchange agent and information agent.

Cash offers for retail holders

In the retail offers, holders must be those who are not considered qualified institutional buyers and who are not non-U.S. persons.

The tender consists of five separate offers to purchase for cash the notes with the special mandatory redemption provision.

The tender offers also will end at 5 p.m. ET on Feb. 22. Tenders may be withdrawn at any time before the offers end.

Settlement is expected to occur on Feb. 27.

The tender offer price for each €1,000 or £1,000 will be as follows:

• €1,010 for the €1.25 billion of floating-rate global notes due Sept. 4, 2023;

• €1,010 for the €750 million 1.05% global notes due Sept. 4, 2023;

• €1,010 for the €1.75 billion 1.8% global notes due Sept. 4, 2026;

• €1,010 for the €1.5 billion 2.35% global notes due Sept. 4, 2029; and

• £1,010 for the £1 billion 3.55% global notes due Sept. 4, 2037.

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

Deutsche Bank AG, London Branch (+44 20 7545-8011), Goldman Sachs & Co. LLC (800 828-3182 or 212 902-6595), Merrill Lynch International (+44 20 7996 5420) and RBC Europe Ltd. (877 381-2099, 212 618-7843 or +44 20 7029 7420) are the joint lead dealer managers.

Lucid Issuer Services Ltd. (+44 20 7704 0880) is the tender agent and information agent.

The telecommunications services provider is based in Dallas.

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