Summary
AT&T Inc. (T) announced a new securitization facility through its subsidiaries New Cingular Wireless PCS, LLC and AT&T Receivables Funding, LLC. This facility, established on June 27, 2014, allows for the sale of equipment installment contracts and related assets. The initial transaction under this facility involved the sale of approximately $1.6 billion in receivables, generating about $800 million in cash for AT&T on June 27, 2014. This transaction is primarily a timing-related cash flow management tool. AT&T has confirmed that this securitization does not alter its previously issued 2014 free cash flow guidance and expects no material impact on its consolidated statements of income or balance sheet. New Cingular will continue to service these receivables and AT&T has provided a performance guarantee.
Key Highlights
- 1Establishment of a Securitization Facility by AT&T subsidiaries for equipment installment contracts.
- 2Facility involves sale of receivables to Citibank N.A. and other banks.
- 3Initial transaction: $1.6 billion in receivables sold, generating $800 million in cash.
- 4Cash receipt of $800 million will be classified as operating cash for Q2 2014.
- 5Transaction is primarily timing-related for cash flow, with no change to 2014 free cash flow guidance.
- 6No material impact expected on AT&T's consolidated income statement or balance sheet.
- 7New Cingular will continue to service the receivables, with AT&T providing a performance guarantee.