AT&T Is Raising $12.5 Billion In Another Bond Sale To Refinance Oustanding Debt

WarneMedia parent AT&T is raising $12.5 billion in its second bond sale in a week that it will use to retire outstanding debt. the company said in an SEC filing Friday.

It’s selling five tranches of global notes for, respectively, $1.5 billion, $2.5 billion (two tranches) and $3 billion (two tranches) due starting 2027 through 2060.

AT&T intends to use the proceeds for the early redemption or repayment of the outstanding debt, and to pay related premiums, accrued interest and fees and expenses associated with such redemption or repayment, it said, referring to four oustanding tranches of global notes and outstanding principal amounts on two term loans — many of which would mature or come due later this year or next.

The highly-leveraged telco giant, which is prepping streaming service HBO Max for launch next week, recently raised €3 billion (about $3.28 billion) in a note sale and will use the cash for general corporate purposes, which may include debt repayments. In April, the company announced it had set up a new $5.5 billion loan agreement at competitive rates with 12 banks to provide it with additional financial flexibility. The loans are pre-payable without penalty, it said, seeks to reassure the markets and employees it’s on solid ground in uncertain COVID-19 times.

AT&T’s debt balloned with its acquisition of Time Warner in 2018 for $85 billion. Debt stood at $150 billion at the end of 2019.

Media companies have been active in the bond market, most recently rasing cash to refinance debt  Discovery, Inc. said yesterday it’s closed on a planned debt refinancing ahead of schedule, using $1.5 billion out of $2 billion it recently raised in a bond sale to pay down old debt. Earlier this week, Comcast raised $4 billion in a bond sale, earmarking all of it to refinance existing debt.

Businesses that can have been raising cash rapidly in recent month to build a cushion against the business devastation of coronavirus. In some cases, like exhibitor AMC Entertainment, the liquidity was needed to keep the lights on. In other cases like Disney and Comcast, building up a bit of a war chest was considered prudent given the lack of operational visibility. Pushing debt obgliations farther into the future  — and with lower interest rates if possible — is another form of commonly used balance sheet protection and can give companies some breathing room.


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AT&T Rolls Out HBO Max Offers To “Tens Of Millions” Of Its U.S. Customers

AT&T will offer WarnerMedia’s HBO Max free or via promotion to “tens of millions” of its U.S. wireless, video and internet customers

The news follows the announcement earlier Tuesday that the streaming service will launch on May 27.

The new service, which features 10,000 hours of original shows, library titles and the full existing HBO offering, will retail for $15 a month. It had previously lined up distribution deals with Charter and YouTube TV. WarnerMedia has promised Wall Street it will have 75 million to 90 million HBO Max subscribers (50 million U.S.) by 2025.

With AT&T driving customer acquisition, “We expect HBO Max to achieve an impressive level of scale
and reach at launch,” said Bob Greenblatt, CEO of WarnerMedia Entertainment and Direct-To-Consumer.

AT&T has planned for years to favor its customer base with HBO Max, but has only now revealed specific details about free and promotional offers.

For starters, current subscribers to HBO through AT&T video services like DirecTV, U-Verse and AT&T TV — roughly 10 million of them — will get access to HBO Max for free. The free access will be included in DirecTV Premier and Lo Maximo; U-Verse U400, U450, and U450 Latino and AT&T TV Now Max packages, as well as a forthcoming AT&T TV Premier package.

New AT&T TV Choice, Xtra or Ultimate, and Óptimo Más package customers and new DirecTV Choice, Xtra, Ultimate or Más Ultra customers can get one year free of HBO Max.

Current customers with other levels of video service will get regular HBO and HBO Max for three months free starting on May 27.

Through wireless, subscribers to the AT&T Unlimited Elite plan will get HBO Max included at no cost. Other wireless plans will feature one-month free trials.

For internet customers, HBO Max will be included free with the AT&T Internet 1000 plan. Other internet subscribers will get one month free.

“AT&T has long been committed to ensuring our customers are connected and entertained, and HBO
Max has something for everyone,” said Thaddeus Arroyo, CEO of AT&T Consumer. “It’s yet another step we’re taking to keep our customers connected to the world around them and the content they love.”

Here’s an overview of offers from AT&T:

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