Bulletin: AT&T Inc. Tender Offer Reduces Subordination Risk For Bondholders

NEW YORK (S&P Global Ratings) Nov. 21, 2019--S&P Global Ratings said today that AT&T Inc.'s announcement that it will offer to tender about $5.2 billion of subsidiary debt in its capital structure is a modest credit positive for bondholders in that it reduces subordination risk. Assuming full participation in the tender, priority obligations to total adjusted debt would decline to around 13% from about 16% as of the third quarter of 2019. AT&T's capital structure consists of $155.6 billion of debt at the main holding company, $6.5 billion of operating subsidiary debt, and $2 billion of capital leases. We also treat $10.6 billion in off-balance-sheet securitizations, $8.8 billion of preferred stock in AT&T Mobility II LLC held by the pension,

...November 21, 2019 NEW YORK (S&P Global Ratings) Nov. 21, 2019--S&P Global Ratings said today that AT&T Inc.'s announcement that it will offer to tender about $5.2 billion of subsidiary debt in its capital structure is a modest credit positive for bondholders in that it reduces subordination risk. Assuming full participation in the tender, priority obligations to total adjusted debt would decline to around 13% from about 16% as of the third quarter of 2019. AT&T's capital structure consists of $155.6 billion of debt at the main holding company, $6.5 billion of operating subsidiary debt, and $2 billion of capital leases. We also treat $10.6 billion in off-balance-sheet securitizations, $8.8 billion of preferred stock in AT&T Mobility II LLC held by the pension, and $1.5 billion of preferred stock in a wireless subsidiary that holds interests in various tower assets as priority obligations relative to debt at AT&T Inc. From a ratings perspective, we do not expect the tender to have any impact...

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