AT&T announces pricing terms of exchange offers for 42 series

By Taylor Fox

New York, Sept. 15 – AT&T Inc. announced the pricing terms and early results of its private offers to exchange 42 series of notes, according to news releases Tuesday.

As announced on Aug. 31, the offers are divided into three pools.

Under pool 1 the company is offering cash and a new series of senior notes due 2053 in exchange for 25 series of outstanding notes. AT&T will accept an amount of notes that results in the issuance of no more than $7.5 billion of new 2053 notes. The 2053 notes cap was increased from $5 billion.

In pool 2, the company is offering a new series of senior notes due 2055 and cash in exchange for 10 series of outstanding notes. AT&T will accept an amount of notes that results in the issuance of no more than $7.5 billion of new 2055 notes. The 2055 notes cap was increased from $5 billion.

Under pool 3 the company is offering cash and a new series of senior notes due 2059 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 $6.5 billion of new 2059 notes. The 2059 notes cap was increased from $5 billion.

For each pool, a minimum condition applies stipulating that, in order for an exchange to be consummated, holders must tender enough notes to result in the issuance of at least $1 billion of the new notes being offered under that pool.

Tenders may no longer be withdrawn as of the early deadline at 5 p.m. ET on Sept. 14.

The exchange offers will expire at 11:59 p.m. ET on Sept. 28.

Early settlement is expected on Sept. 18 and final settlement on Sept. 30.

Pool 1 offers

The following amounts were tendered by the early deadline, with each total consideration per $1,000 principal amount of notes, listed in order of acceptance priority level, under the pool 1 offers:

• $16,536,000 of New Cingular Wireless Services, Inc.’s $274,942,000 of 8.75% senior notes due 2031 (Cusip: 00209AAF3), with pricing set at $1,605.03, based on the 0.625% Treasury note due Aug. 15, 2030 plus 155 basis points and 40% of the premium to be paid in cash;

• $4,557,000 of AT&T Corp.’s $109,211,000 outstanding 8.75% senior notes due Nov. 15, 2031 (Cusip: 001957BD0, U03017BC0), with pricing set at $1,627.70, based on the 0.625% Treasury note due Aug. 15, 2030 plus 165 bps and 50% of the premium to be paid in cash;

• $15,000 of Historic TW Inc.’s $156,007,000 outstanding 8.3% discount debentures due 2036 (Cusip: 887315AZ2), with pricing set at $1,576.63, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 40% of the premium to be paid in cash;

• $29,000 of Time Warner’s $139,051,000 outstanding 7.7% debentures due 2032 (Cusip: 00184AAG0), with pricing set at $1,537.37, based on the 0.625% Treasury note due Aug. 15, 2030 plus 170 bps and 25% of the premium to be paid in cash;

• $139,000 of Time Warner’s $155,466,000 outstanding 7.625% debentures due 2031 (Cusip: 00184AAC9), with pricing set at $1,505.84, based on the 0.625% Treasury note due Aug. 15, 2030 plus 155 bps and 25% of the premium to be paid in cash;

• $235,000 of AT&T Mobility LLC’s $151,402,000 outstanding 7.125% senior notes due 2031 (Cusip: 17248RAJ5), with pricing set at $1,471.90, based on the 0.625% Treasury note due Aug. 15, 2030 plus 165 bps and 45% of the premium to be paid in cash;

• $1.59 million of BellSouth, LLC’s $113,757,000 outstanding 6.875% senior due 2031 (Cusip: 079860AD4), with pricing set at $1,441.50, based on the 0.625% Treasury note due Aug. 15, 2030 plus 165 bps and 40% of the premium to be paid in cash;

• $799,000 of BellSouth’s $147,409,000 outstanding 6.55% notes due 2034 (Cusip: 079860AE2), with pricing set at $1,464.26, based on the 0.625% Treasury note due Aug. 15, 2030 plus 185 bps and 25% of the premium to be paid in cash;

• $2,634,000 of BellSouth’s $201,055,000 outstanding 6% notes due 2034 (Cusip: 079860AK8), with pricing set at $1,403.58, based on the 0.625% Treasury note due Aug. 15, 2030 plus 190 bps and 25% of the premium to be paid in cash;

• $1,015,000 of AT&T Inc.’s $128.33 million outstanding 6.8% notes due 2036 (Cusip: 00206RAB8), with pricing set at $1,405.60, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 60% of the premium to be paid in cash;

• $66,925,000 of AT&T Inc.’s $510,063,000 outstanding 6.55% global notes due 2039 (Cusip: 00206RAS1) with pricing set at $1,466.82, based on the 1.25% Treasury note due May 15, 2050 plus 175 bps and 25% of the premium to be paid in cash;

• $4,274,000 of AT&T Inc.’s $160,252,000 outstanding 6.5% global notes due 2036 (Cusip: 00206RJC7), with pricing set at $1,378.35, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash;

• $172,847,000 of AT&T Inc.’s $412,098,000 outstanding 6.5% global notes due 2037 (Cusip: 00206RAD4), with pricing set at $1,449.01, based on the 1.25% Treasury note due May 15, 2050 plus 165 bps and 25% of the premium to be paid in cash;

• $64,018,000 of AT&T Inc.’s $229,036,000 outstanding 6.4% global notes due 2038 (Cusip: 00206RAN2), with pricing set at $1,440.97, based on the 1.25% Treasury note due May 15, 2050 plus 170 bps and 25% of the premium to be paid in cash;

• $332,905,000 of AT&T Inc.’s $490,483,000 outstanding 6.35% global notes due 2040 (Cusip: 00206RDE9), with pricing set at $1,448.68, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $99,983,000 of AT&T Inc.’s $849.36 million outstanding 6.3% global notes due 2038 (Cusip: 00206RAG7), with pricing set at $1,429.76, based on the 1.25% Treasury note due May 15, 2050 plus 165 bps and 25% of the premium to be paid in cash;

• $64,365,000 of AT&T Inc.’s $329,267,000 outstanding 6.2% global notes due 2040 (Cusip: 00206RJD5), with pricing set at $1,427.10, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $144,331,000 of AT&T Inc.’s $392,704,000 outstanding 6.1% global notes due 2040 (Cusip: 00206RJE3), with pricing set at $1,417.73, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $763,203,000 of AT&T Inc.’s $1,234,030,000 outstanding 6% global notes due 2040 (Cusip: 00206RDF6), with pricing set at $$1,400.79, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $720,248,000 of AT&T Inc.’s $1,789,560,000 outstanding 5.35% global notes due 2040 (Cusip: 04650NAB0, U9475PAA6), with pricing set at $1,310.01, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $1,205,610,000 of AT&T Inc.’s $3 billion outstanding 5.25% global notes due 2037 (Cusip: 00206RDR0), with pricing set at $1,279.17, based on the 1.25% Treasury note due May 15, 2050 plus 160 bps and 25% of the premium to be paid in cash;

• $595,718,000 of AT&T Inc.’s $1,278,679,000 outstanding 4.9% global notes due 2037 (Cusip: 00206RFW7, U04644CJ4), with pricing set at $1,240.31, based on the 1.25% Treasury note due May 15, 2050 plus 180 bps and 25% of the premium to be paid in cash;

• $1,043,764,000 of AT&T Inc.’s $2 billion outstanding 4.85% global notes due 2039 (Cusip: 00206RHK1), with pricing set at $1,242.68, based on the 1.25% Treasury note due May 15, 2050 plus 165 bps and 25% of the premium to be paid in cash;

• $1,303,859,000 of AT&T Inc.’s $2.5 billion outstanding 4.8% global notes due 2044 (Cusip: 00206RCG5), with pricing set at $1,236.50, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash; and

• $559.95 million of AT&T Inc.’s $1,956,149,000 outstanding 4.3% global notes due 2042 (Cusip: 00206RBH4, 00206RBG6), with pricing set at $1,149.18, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash.

The cash payment percent of the premium is the percent of the amount by which the total consideration exceeds $1,000 in principal amount and cash per $1,000 principal amount of old notes.

In each case, there will be an early participation payment for series in the pool 1 offers equal to $50 principal amount of new 2053 notes.

Pool 2 offers

The following amounts were tendered by the early deadline, with each total consideration per $1,000 principal amount of notes, listed in order of acceptance priority level, under the pool 2 offers:

• $379,856,000 of AT&T Inc.’s $984,108,000 outstanding 6.375% global notes due 2041 (Cusip: 00206RDG4), with pricing set at $1,499.03, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $191,405,000 of AT&T Inc.’s $521,724,000 outstanding 6.25% global notes due 2041 (Cusip: 00206RJF0), with pricing set at $1,431.75, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $333,392,000 of AT&T Inc.’s $1,009,543,000 outstanding 5.55% global notes due 2041 (Cusip: 00206RBA9), with pricing set at $$1,332.42, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $260.61 million of AT&T Inc.’s $447,305,000 outstanding 5.375% global notes due 2041 (Cusip: 00206RJG8), with pricing set at $1,307.91, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $244,857,000 of AT&T Inc.’s $436,339,000 outstanding 5.35% global notes due 2043 (Cusip: 00206RJJ2), with pricing set at $1,325, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $618,319,000 of AT&T Inc.’s $1,208,505,000 outstanding 5.15% global notes due 2042 (Cusip: 00206RDH2), with pricing set at $1,277.78, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $1,007,433,000 of AT&T Inc.’s $1,750,725,000 outstanding 5.15% global notes due 2046 (Cusip: 00206RHA3, 00206RFM9 and U04644BX4), with pricing set at $1,302.03, based on the 1.25% Treasury note due May 15, 2050 plus 195 bps and 25% of the premium to be paid in cash;

• $394,633,000 of AT&T Inc.’s $795,686,000 outstanding 4.85% global notes due 2045 (Cusip: 00206RJL7), with pricing set at $1,252, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash;

• $1,628,202,000 of AT&T Inc.’s $3.5 billion outstanding 4.75% global notes due 2046 (Cusip: 00206RCQ3), with pricing set at $1,230.87, based on the 1.25% Treasury note due May 15, 2050 plus 195 bps and 25% of the premium to be paid in cash; and

• $1,548,464,000 of AT&T Inc.’s $3,043,850,000 outstanding 4.35% global notes due 2045 (Cusip: 00206RBK7, U04644AE7), with pricing set at $1,168.71, based on the 1.25% Treasury note due May 15, 2050 plus 190 bps and 25% of the premium to be paid in cash.

The cash payment percent of the premium is the percent of the amount by which the total consideration exceeds $1,000 in principal amount and cash per $1,000 principal amount of old notes.

In each case, there will be an early participation payment for series in the pool 2 offers equal to $50 principal amount of new 2055 notes.

Pool 3 offers

The following amounts were tendered by the early deadline, with each total consideration per $1,000 principal amount of notes, listed in order of acceptance priority level, under the pool 3 offers:

• $514,799,000 of AT&T Inc.’s $1 billion outstanding 5.7% global notes due 2057 (Cusip: 00206RDT6), with pricing set at $1,413.78, based on the 1.25% Treasury note due May 15, 2050 plus 220 bps and 60% of the premium to be paid in cash;

• $540,565,000 of AT&T Inc.’s $1.5 billion outstanding 5.65% global notes due 2047 (Cusip: 00206RCU4), with pricing set at $1,379.04, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash;

• $1,251,477,000 of AT&T Inc.’s $2 billion outstanding 5.45% global notes due 2047 (Cusip: 00206RDS8), with pricing set at $1,345.27, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash;

• $461,929,000 of AT&T Inc.’s $643,744,000 outstanding 5.3% global notes due 2058 (Cusip: 00206RFS6, U04644CG0), with pricing set at $1,340.23, based on the 1.25% Treasury note due May 15, 2050 plus 220 bps and 25% of the premium to be paid in cash;

• $753,335,000 of AT&T Inc.’s $1,694,666,000 outstanding 5.15% global notes due 2050 (Cusip: 00206RFU1), with pricing set at $1,302.83, based on the 1.25% Treasury note due May 15, 2050 plus 205 bps and 25% of the premium to be paid in cash;

• $1,569,246,000 of AT&T Inc.’s $2.5 billion outstanding 4.55% global notes due 2049 (Cusip: 00206RDM1, 00206RDK5), with pricing set at $1,200.42, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash; and

• $2,240,736,000 of AT&T Inc.’s $4,499,999,000 outstanding 4.5% global notes due 2048 (Cusip: 00206RDL3, 00206RDJ8) with pricing set at $1,187.30, based on the 1.25% Treasury note due May 15, 2050 plus 200 bps and 25% of the premium to be paid in cash.

The cash payment percent of the premium is the percent of the amount by which the total consideration exceeds $1,000 in principal amount and cash per $1,000 principal amount of old notes.

In each case, there will be an early participation payment for series in the pool 3 offers equal to $50 principal amount of new 2059 notes.

Holders will receive accrued interest in cash.

AT&T had said it expects the dealer managers selected will include 22 minority-, disabled veteran-, and women-owned brokerage firms.

The exchange agent and information agent is Global Bondholders Services Corp. (866 470-3900, 212 430-3774 or contact@gbsc-usa.com).

AT&T is a telecommunications services provider based in Dallas.

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