OREANDA-NEWS. February 23, 2016. AT&T Inc. (NYSE: T; and AT&T) today announced the commencement of offers to exchange all validly tendered (and not validly withdrawn) and accepted notes of the following series issued by DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. (together, DTV) and guaranteed by DIRECTV Group Holdings, LLC, a wholly owned subsidiary of AT&T, for notes to be issued by AT&T as described in the table below.  A Registration Statement on Form S-4 (the Registration Statement) relating to the issuance of the AT&T Notes was filed with the Securities and Exchange Commission (SEC) on February 19, 2016 but has not yet been declared effective.

Aggregate Principal Amount
(mm)

Title of Series of Notes Issued by DTV to be Exchanged (collectively, the DTV Notes)

CUSIP/ISIN No.

Title of Series of Notes to be Issued by AT&T (collectively, the AT&T Notes)

Exchange Consideration (1)(2)

Early Participation Premium (1)(2)

Total Consideration (1)(2)(3)

 

 

 

 

AT&T Notes

(principal amount)

Cash

AT&T Notes

(principal amount)

AT&T Notes

(principal amount)

Cash

\\$1,250

2.400% Senior Notes due 2017

25459HBE4

2.400% Global Notes due 2017

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$750

1.750% Senior Notes due 2018

25459HBH7

1.750% Global Notes due 2018

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,000

5.875% Senior Notes due 2019

25459HAU9

5.875% Global Notes due 2019

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,300

5.200% Senior Notes due 2020

25459HAT2;

25459HAR6;

U25398AH8

5.200% Global Notes due 2020

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,000

4.600% Senior Notes due 2021

25459HAW5

4.600% Global Notes due 2021

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,500

5.000% Senior Notes due 2021

25459HBA2

5.000% Global Notes due 2021

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,500

3.800% Senior Notes due 2022

25459HBF1;

25459HBD6; U25398AL9

3.800% Global Notes due 2022

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,250

4.450% Senior Notes due 2024

25459HBL8

4.450% Global Notes due 2024

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,200

3.950% Senior Notes due 2025

25460CAA1

3.950% Global Notes due 2025

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$500

6.350% Senior Notes due 2040

25459HAQ8

6.350% Global Notes due 2040

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,250

6.000% Senior Notes due 2040

25459HAX3

6.000% Global Notes due 2040

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,000

6.375% Senior Notes due 2041

25459HAZ8

6.375% Global Notes due 2041

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

\\$1,250

5.150% Senior Notes due 2042

25459HBG9

5.150% Global Notes due 2042

\\$970

\\$1.00

\\$30

\\$1,000

\\$1.00

500

2.750% Senior Notes due 2023

XS0933547456

2.750% Global Notes due 2023

970

1.00

30

1,000

1.00

?750

4.375% Senior Notes due 2029

XS0830326269

4.375% Global Notes due 2029

?970

?1.00

?30

?1,000

?1.00

?350

5.200% Senior Notes due 2033

XS0994920238

5.200% Global Notes due 2033

?970

?1.00

?30

?1,000

?1.00

(1) Consideration per \\$1,000 principal amount of DTV U.S. Notes, 1,000 principal amount of DTV Euro Notes or ?1,000 principal amount of DTV Sterling Notes, as applicable, validly tendered and accepted for exchange, subject to any rounding as described herein.
(2) The term AT&T Notes in this column refers, in each case, to the series of AT&T Notes corresponding to the series of DTV Notes of like tenor and coupon.

(3) Includes the Early Participation Premium for DTV Notes validly tendered prior to the Early Participation Date described below and not validly withdrawn.

In connection with the exchange offers, AT&T is also soliciting consents from holders of the DTV Notes to (1) eliminate substantially all of the restrictive covenants in the DTV Indentures; (2) eliminate certain Events of Default; and (3) eliminate the change of control and ratings decline covenant.  If the proposed amendments are adopted, all such DTV Notes will be governed by amended indentures, which will have less restrictive terms and afford reduced protections to the holders of those securities compared to those currently in the indentures or those applicable to the AT&T Notes.  In particular, holders of the DTV Notes under the amended indentures will no longer receive annual, quarterly and other reports from DTV.

The exchange offers and consent solicitations (together, the Exchange Offers) commenced on February 19, 2016 and expire at 11:59 p.m., New York City time, on March 17, 2016, unless extended or terminated (the Expiration Date).

In exchange for each of:

(1)       \\$1,000 principal amount of dollar-denominated DTV Notes (the DTV U.S. Notes) that is validly tendered prior to 5:00 p.m., New York City time, on March 3, 2016 (the Early Participation Date) and not validly withdrawn, holders will receive the total exchange consideration set out in the table above (the Total Consideration), which consists of \\$1,000 principal amount of dollar-denominated AT&T Notes (the AT&T U.S. Notes) and a cash amount of \\$1.00;

(2)       1,000 principal amount of euro-denominated DTV Notes (the DTV Euro Notes) that is validly tendered prior to the Early Participation Date and not validly withdrawn, holders will receive the Total Consideration, which consists of 1,000 principal amount of euro-denominated AT&T Notes (the AT&T Euro Notes) and a cash amount of 1.00; and

(3)       ?1,000 principal amount of GBP-denominated DTV Notes (the DTV Sterling Notes) that is validly tendered prior to the Early Participation Date and not validly withdrawn, holders will receive the Total Consideration, which consists of ?1,000 principal amount of GBP-denominated AT&T Notes (the AT&T Sterling Notes) and a cash amount of ?1.00.

The Total Consideration includes the early participation premium set out in the table above (the Early Participation Premium), which consists of \\$30 principal amount of AT&T U.S. Notes, 30 principal amount of AT&T Euro Notes or ?30 principal amount of AT&T Sterling Notes, respectively.

In exchange for each of:

(1)       \\$1,000 principal amount of DTV U.S. Notes that is validly tendered after the Early Participation Date but prior to the Expiration Date and not validly withdrawn, holders will receive only the exchange consideration set out in the table above (the Exchange Consideration), which is equal to the Total Consideration less the Early Participation Premium and so consists of \\$970 principal amount of AT&T U.S. Notes and a cash amount of \\$1.00;

(2)       1,000 principal amount of DTV Euro Notes that is validly tendered after the Early Participation Date but prior to the Expiration Date and not validly withdrawn, holders will receive only the Exchange Consideration, which is equal to the Total Consideration less the Early Participation Premium and so consists of 970 principal amount of AT&T Euro Notes and a cash amount of 1.00; and

(3)       ?1,000 principal amount of DTV Sterling Notes that is validly tendered after the Early Participation Date but prior to the Expiration Date and not validly withdrawn, holders will receive only the Exchange Consideration, which is equal to the Total Consideration less the Early Participation Premium and so consists of ?970 principal amount of AT&T Sterling Notes and a cash amount of ?1.00.

Each AT&T Note issued in exchange for a DTV Note will have an interest rate and maturity that is identical to the interest rate and maturity of the tendered DTV Note, as well as identical interest payment dates and optional redemption prices.  No accrued but unpaid interest will be paid on the DTV Notes in connection with the exchange offers.  However, interest on the applicable AT&T Note will accrue from and including the most recent interest payment date of the tendered DTV Note.  Subject to the minimum denominations and minimum consideration amounts as described in the Registration Statement, the principal amount of each AT&T Note will be rounded down, if necessary, to the nearest whole multiple of either \\$1,000, 1,000 or ?1,000, respectively, and we will pay cash equal to the remaining portion, if any, of the exchange price of such DTV Note.  The AT&T Notes will be unsecured and unsubordinated obligations of AT&T and will rank equally with all other unsecured and unsubordinated indebtedness of AT&T issued from time to time.  The AT&T Notes will be structurally subordinated to all existing and future obligations of AT&Ts current and future subsidiaries.

The dealer managers for the Exchange Offers relating to the DTV U.S. Notes are:

BofA Merrill Lynch

214 North Tryon Street, 21st Floor

Charlotte, North Carolina 28255

Attention: Liability Management Group

Collect: (980) 683-3215

Toll-Free: (888) 292-0070

Credit Suisse
Eleven Madison Avenue

New York, New York 10010

Attention: Liability Management Group

Collect: (212) 325-2476

Toll-Free: (800) 820-1653

Deutsche Bank Securities
60 Wall Street
New York, New York 10005
Attention: Liability Management Group

Collect: (212) 250-2955
Toll-Free: (866) 627-0391

The dealer managers for the Exchange Offers relating to the DTV Euro Notes and DTV Sterling Notes are:

Merrill Lynch International

2 King Edward Street

London EC1A 1HQ

United Kingdom

Attention: Liability Management Group

Phone: +44 (0) 20 7996 5698

Email: DG.LM_EMEA@baml.com

Credit Suisse
One Cabot Square

London E14 4QJ

United Kingdom

Attention: Liability Management Group

Phone: +44 (0) 20 7883 8763

Email: liability.management@credit-suisse.com

Deutsche Bank AG, London Branch
Winchester House

1 Great Winchester Street

London EC2N 2DB
United Kingdom
Attention: Liability Management Group

Phone: +44 20 7545 8011
Email: liability.management@db.com

The exchange agent and information agent for the Exchange Offers relating to the DTV U.S. Notes is:

 

 

 

By Facsimile (Eligible Institutions Only):
(212) 430-3775 or
(212) 430-3779

Global Bondholder Services Corporation

By E-Mail:

contact@gbsc-usa.com

 

 

 

By Mail or Hand:
65 BroadwaySuite 404
New York, New York 10006

The exchange agent and information agent for the Exchange Offers relating to the DTV Euro Notes and DTV Sterling Notes is:

 

 

 

By E-Mail:
att@lucid-is.com

Lucid Issuer Services Limited

 

By Mail, Hand or Overnight Delivery:
Lucid Issuer Services Limited

Tankerton Works

12 Argyle Walk

London WC1H 8HA

United Kingdom
Attention: Sunjeeve Patel / Paul Kamminga

 

 

 

Confirmation by Telephone:

+44 20 7704 0880

The Exchange Offers are being made pursuant to the terms and conditions set forth in AT&Ts preliminary prospectus, dated as of February 19, 2016 (the Prospectus), which forms a part of the Registration Statement, and, with respect to the DTV U.S. Notes, the related Letter of Transmittal and Consent (the Letter of Transmittal).  Tendered DTV Notes, and related consents, may be validly withdrawn at any time prior to the Expiration Date and AT&T may terminate or withdraw the Exchange Offers at any time for any reason.

This press release is not an offer to sell or a solicitation of an offer to buy any of the securities described herein and is also not a solicitation of the related consents.  The Exchange Offers may be made solely pursuant to the terms and conditions of the Prospectus, the Letter of Transmittal and the other related materials.  A Registration Statement relating to the AT&T Notes has been filed with the SEC but has not yet become effective.  The AT&T Notes may not be sold, nor may offers to buy be accepted, prior to the time the Registration Statement is declared effective by the SEC.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

Any offer of the AT&T U.S. Notes made to holders of the DTV U.S. Notes which are located or resident in any Member State of the European Economic Area which has implemented Directive 2003/71/EC, as amended, including by Directive 2010/73/EU, (the Prospectus Directive) will only be addressed to holders (i) which are qualified investors as defined in the Prospectus Directive or (ii) which agree to acquire the AT&T U.S. Notes for a total consideration equivalent to at least 100,000 per investor.  Any holder, not being a qualified investor, that does not agree to acquire such amount will not be able to participate in the Exchange Offers.

In the United Kingdom, this press release is only being communicated to, and any other documents or materials relating to the Exchange Offers are only being distributed to and are only directed at, (i) persons who are outside the United Kingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the Order) or (iii) high net worth entities falling within Articles 49(2)(a) to (d) of the Order (all such persons together being referred to as relevant persons).  Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.  Any person who is not a relevant person should not act or rely on this announcement or any of its contents.

###

CAUTIONARY LANGUAGE CONCERNING FORWARD-LOOKING STATEMENTS

Information set forth in this news release contains forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially.  A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission and in the Registration Statement related to the Exchange Offers. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.