AT&T Brings $12.5 Billion Bond Sale to Refinance Debt in Rally

(Bloomberg) -- AT&T Inc. brought a new bond sale, taking advantage of a global rally in credit to refinance outstanding debt.

The wireless carrier is issuing $12.5 billion of unsecured bonds in five parts, according to people with knowledge of the matter. The longest part of the offering, a 40-year security, will yield 250 basis points over Treasuries, down from initial talk of around 280 basis points, the people said, asking not to be identified as the details are private.

The bond sale comes as companies have been borrowing at a rampant pace to shore up liquidity through the pandemic, while stronger ones like AT&T have used the opportunity to refinance debt. U.S. investment-grade spreads rallied below 200 basis points this week for the first time since shutdowns started two months ago, as investors continue to hunt for yields of high-quality borrowers.

The proceeds will be used to refinance bonds and also a $5.5 billion term loan that AT&T took out in April, the people said. The company raised the loan for short-term liquidity with a group of banks following a spike in commercial-paper costs.

AT&T, the largest non-financial corporate borrower in the world, has been chipping away at its now $164 billion debt load, down from a peak of nearly $200 billion within the past few years. Most of that stems from borrowings to finance its acquisitions of Time Warner Inc. and DirecTV.

Bank of America Corp., Goldman Sachs Group Inc., Mizuho Financial Group Inc., Royal Bank of Canada and Wells Fargo & Co. managed the bond sale, the people said.

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