AT&T Selling Bonds in Euros to Help Finance DirecTV Purchase

AT&T Inc. (T) is marketing bonds in Europe a day after selling $2 billion of notes as it finances its proposed $48.5 billion acquisition of DirecTV.

The U.S. mobile carrier is issuing a total 2.1 billion euros ($2.9 billion) of securities maturing in 10 years and 20 years, according to a person familiar with the sale. AT&T sold 30-year bonds to U.S. investors yesterday to yield about 4.8 percent, data compiled by Bloomberg show.

AT&T plans to buy DirecTV, the largest U.S. satellite-TV provider, in a cash-and-stock deal to help it compete with Comcast Corp. and Time Warner Cable Inc., which also plan to merge. Dallas-based AT&T plans to finance the cash portion of the takeover through “opportunistic debt market transactions,” as well as asset sales, loans and existing holdings of cash, it said in a May 18 statement.

AT&T is selling 1.6 billion euros of 10-year bonds that will be priced to yield 83 basis points more than the mid-swap rate and 500 million euros of 20-year notes at a spread of 115 basis points, said the person, who asked not to be identified because they’re not authorized to speak about it.

The average yield investors demand to hold corporate bonds in euros due in 10 years or longer fell to a record 2.73 percent last week, according to Bank of America Merrill Lynch index data. The gauge has since climbed 10 basis points.

AT&T is rated A3 by Moody’s Investors Service and an equivalent A- by Standard & Poor’s.

(An earlier version of the story was corrected to show the index yield fell to 2.73 percent.)

To contact the reporter on this story: Jennifer Joan Lee in London at jlee176@bloomberg.net

To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net Tom Freke, Michael Shanahan

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