US incumbent AT&T has priced two tranches of notes amounting to €2bn (US$2.7bn), which it will put towards its planned US$4bn buyback of notes.
The first €1bn tranche maturing in 2021 carries a coupon of 2.65% and priced at 99.774, equivalent to 95…
US incumbent AT&T has priced two tranches of notes amounting to €2bn (US$2.7bn), which it will put towards its planned US$4bn buyback of notes.
The first €1bn tranche maturing in 2021 carries a coupon of 2.65% and priced at 99.774, equivalent to 95 bps over midswaps, to yield 2.73%.
The second is due in 2025 and priced at 99.577, 130 bps over midswaps. This series of notes has a 3.5% interest rate and an all-in yield of 3.58%.
Deutsche Bank, JP Morgan, Morgan Stanley and RBS are the joint bookrunning managers on the offering.
Deutsche Bank and JP Morgan are also managing AT&T’s US$4bn tender offer to buy back some of its older series of notes. Moody’s rated the Dallas-based telco’s new bond offering at A3, S&P at A-, and Fitch at A.
AT&T is currently exploring the possibility of entering Europe. In a note this morning, Bernstein Research analysts believe there is a 75% chance the US incumbent will do a deal with British telco Vodafone Group, reasoning that a merger could be in the best interests of both operators.
“After long years of a high price umbrella and the super-profits that come with a near duopoly of the US wireless market, landlocked AT&T is vulnerable to increasingly credible price competition,” Bernstein said.
“Vodafone, on the other hand, faces a narrowing set of strategic options as fixed-wireless convergence and regulatory change transforms European competition to Vodafone’s disadvantage…There is a turnaround story dying to get out of Vodafone”.
