AT&T issues $3.87 billion notes to wrap exchanges for four series

By Wendy Van Sickle

Columbus, Ohio, April 10 – AT&T Inc. announced the final amount of new notes issued as a result of its private exchange offers for four series of notes.

The exchange offers and concurrent tender offers for the same notes ended at 5 p.m. ET on April 5. Settlement occurred on Tuesday.

The company issued $250,418,000 of floating-rate global notes due 2023; $1,278,679,000 of 4.9% global notes due 2037; $1,694,666,000 of 5.15% global notes due 2050; and $643,744,000 of 5.3% global notes due 2058, according to a press release.

As previously reported, AT&T accepted all of the notes tendered for cash and for exchange, according to two separate company releases on Friday. The total of exchange notes issued rose slightly from the company’s Friday estimate, as the final figure takes into account notes that were exchanged under guaranteed delivery procedures.

As announced on March 29, in the exchange offers the company was seeking to replace notes that have a special mandatory redemption provision for notes that do not have that provision. The new notes will mature one day later than the existing notes. The exchange was being conducted under Rule 144A and Regulation S.

For each $1,000 principal amount of existing notes, AT&T paid $1,000 principal amount of new notes plus $2.50 in cash.

Concurrent tender offers were open to all holders.

In the tenders, AT&T paid $1,002.50 in cash for each $1,000 principal amount.

The total notes tendered under the exchange are as follow:

• $643,744,000 of the $2.5 billion of 5.3% global notes due Aug. 14, 2058. The exchange had a minimum tender provision of $300 million and the exchange notes will mature on Aug. 15, 2058;

• $1,694,666,000 of the $4,951,500,000 of 5.15% global notes due Feb. 14, 2050. The exchange had a minimum tender provision of $300 million and the exchange notes will mature on Feb. 15, 2050;

• $1,278,679,000 of the $4.5 billion of 4.9% global notes due Aug. 14, 2037. The exchange had a minimum tender provision of $300 million and the exchange notes will mature on Aug. 15, 2037; and

• $250,418,000 of the $750 million of floating-rate global notes due Feb. 14, 2023. The exchange had no minimum tender provision and the exchange notes will mature on Feb. 15, 2023.

In the cash tender, holders tendered $4,718,000 of the 5.3% notes, $3,967,000 of the 5.15% notes, $5,913,000 of the 4.9% notes and $10,462,000 of the floaters.

At settlement, AT&T said it paid $10,488,155 for the floaters due 2023, $5,927,782.50 for the 4.9% notes, $3,976,917.50 for the 5.15% notes and $4,729,795.00 for the 5.3% notes. AT&T also paid accrued interest to but excluding settlement for each series in the tender offers.

No accrued interest was paid in the exchange but interest will accrue on the new notes from and including the most recent interest payment date of the old notes.

Conditions to the exchanges and tenders included that the old notes are not subject to redemption under the special mandatory redemption and that AT&T determines that conditions to its proposed acquisition of Time Warner Inc. are likely to be satisfied or waived by April 22.

Global Bondholder Services Corp. (866 470-3900, 212 430-3774 or http://gbsc-usa.com/eligibility/att) is information agent and exchange agent for the exchanges.

Credit Suisse Securities (USA) LLC (800 820-1653 or 212 325-2476), J.P. Morgan Securities LLC (866 834-4666 or 212 834-3424), Mizuho Securities USA LLC (866 271-7403 or 212 205-7736) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760) are dealer managers for the tender offers.

Global Bondholder Services Corp. (866 470-3900, 212 430-3774 or http://gbsc-usa.com/att) is information agent and tender agent for the tenders.

AT&T is a Dallas-based telecommunications company.

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