Summary
AT&T Inc. (T), through its subsidiary Pacific Bell Telephone Company, has announced the redemption of all outstanding 7.375% Debentures due July 15, 2043. This action, initiated on May 23, 2013, with a redemption date set for July 15, 2013, represents a significant move by the company to manage its debt obligations. Investors holding these specific debentures should be aware of the impending redemption and the associated payout terms. The total cash outlay for this redemption is expected to be approximately $309 million, comprising $300 million in principal and a $9 million call premium. Importantly, AT&T plans to fund this entire amount using its existing cash on hand. This suggests a stable liquidity position and a proactive approach to optimizing the company's capital structure by retiring higher-interest debt.
Key Highlights
- 1AT&T subsidiary Pacific Bell Telephone Company issued notice to redeem all 7.375% Debentures due July 15, 2043.
- 2The redemption date is set for July 15, 2013.
- 3The redemption price is 102.89% of the principal amount.
- 4The total principal amount of the debentures to be redeemed is $300 million.
- 5The estimated aggregate cash payment is approximately $309 million, including a $9 million call premium.
- 6The redemption will be funded from AT&T's existing cash on hand.
- 7This action indicates AT&T's proactive debt management and potential optimization of its cost of capital.