US telco AT&T has sold notes worth US$17.5bn in the third-largest corporate-bond sale ever to help fund its acquisition of DTH operator DirecTV.
The group expects regulators will approve its US$49bn deal for the Californian satellite broadcaster this…
US telco AT&T has sold notes worth US$17.5bn in the third-largest corporate-bond sale ever to help fund its acquisition of DTH operator DirecTV.
The group expects regulators will approve its US$49bn deal for the Californian satellite broadcaster this quarter, even as a similar sized merger attempt between media giants Comcast and Time Warner Cable appears to be unravelling.
The mega bond is spread across multiple tranches: US$3bn due 2020 with a 2.4% coupon, US$2.75bn due 2022 with 3%, US$5bn due 2025 with 3.4%, US$2.5bn due 2035 with 4.5%, US$3.5bn due 2046 with 4.75%, and US$0.75bn of floating notes due 2020.
The issue price for each tranche was between 99.644% (for the 2046 notes) and 100% (for the floating-rate notes).
Investors reportedly submitted about US$68bn in orders for the new bonds, nearly four-times the offer.
BofA Merrill Lynch, JP Morgan and Morgan Stanley were listed as joint book running managers.
AT&T announced it would buy DirecTV in May, and has made a number of commitments to help push the deal through, such as rolling out an enhanced fibre-to-the-premises service to an additional two million locations.
Earlier this week, California Governor Jerry Brown was cited telling the FCC that he supported the merger, saying it would keep thousands of jobs in the state while helping businesses and consumers there.
As well as boosting AT&T’s US pay-TV subscriber base from five million to 26 million, the merger would also give it a business in Latin America’s emerging market.
Moody’s has rated the notes Baa1 (Negative), S&P BBB+ (Stable) and Fitch A- (Stable).
