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AT&T sells $2B in debt ahead of DirecTV deal

  • AT&T (T) has sold $2B worth of 30-year bonds yielding 4.8%, or just 140 bps more than comparable Treasurys.
  • Analysts think Ma Bell could sell as much as $7.5B in debt to help pay for the DirecTV deal, which has a $14.6B ($28.50/share) cash component.
  • As it is, AT&T had $79.9B in debt at the end of Q1, offset by just $7.2B in cash/investments. 2014 free cash flow is expected to total $11B, and dividend payments are set to be around $9.5B.
  • Previous: AT&T slips following guidance
Comments (2)
  • jarco
    , contributor
    Comments (1486) | Send Message
     
    The question is . . . what will be the projected free cash flow AFTER the acquisition? T claims it will be "accretive" which usually relates to earnings, not cash flow.
    3 Jun, 05:31 PM Reply Like
  • FunnelVision
    , contributor
    Comments (12) | Send Message
     
    Rough calculation on T FCF after the transaction gives a delta (new T) +$2.6 + 1.6 = 4.2 BN/y (DTV FCF + synergies). The figure is more likely to improve in the coming years. This of course assumes that the invesment budget is being kept steady.
    4 Jun, 06:17 AM Reply Like
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