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MarketScreener Homepage  >  Equities  >  Nyse  >  AT&T Inc.    T

AT&T INC.

(T)
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AT&T INC. : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (form 8-K)

11/18/2020 | 07:03am EST

ITEM 1.01 Entry into a Material Definitive Agreement.

On November 17, 2020, AT&T Inc. (the "Company") entered into a $7.5 billion Amended and Restated Credit Agreement (the "2025 Credit Agreement"), with Citibank, N.A., as agent, amending and restating the Company's existing $7.5 billion Amended and Restated Credit Agreement, dated as of December 11, 2018. On November 17, 2020, the Company also entered into the first amendment (the "Amendment") to the $7.5 billion Five Year Credit Agreement, dated as of December 11, 2018, with Citibank, N.A., as agent (as amended by the Amendment, the "2023 Credit Agreement" and, together with the 2025 Credit Agreement, the "Revolving Credit Agreements").

In the event advances are made under either of the Revolving Credit Agreements, those advances would be used for general corporate purposes.

Advances under each of the Revolving Credit Agreements will bear interest, at the Company's option, either:



     •    at a variable annual rate equal to: (1) the highest of (but not less than
          zero) (a) the rate of interest announced publicly by Citibank in New
          York, New York, from time to time, as Citibank's base rate, (b) 0.5% per
          annum above the federal funds rate, and (c) the London interbank offered
          rate (or the successor thereto) ("LIBOR") applicable to dollars for a
          period of one month plus 1.00%, plus (2) an applicable margin, as set
          forth in the applicable Revolving Credit Agreement (the "Applicable
          Margin for Base Advances"); or




     •    at a rate equal to: (i) LIBOR (adjusted upwards to reflect any bank
          reserve costs) for a period of one, two, three or six months, as
          applicable, plus (ii) an applicable margin, as set forth in the
          applicable Revolving Credit Agreement (the "Applicable Margin for
          Eurodollar Rate Advances").

The Applicable Margin for Eurodollar Rate Advances under each of the Revolving Credit Agreements will be equal to 0.680%, 0.920%, 1.025% or 1.125% per annum depending on the Company's unsecured long-term debt ratings. The Applicable Margin for Base Advances will be equal to the greater of (x) 0.00% and (y) the relevant Applicable Margin for Eurodollar Rate Advances minus 1.00% per annum, depending on the Company's unsecured long-term debt ratings.

The Company will also pay a facility fee of 0.070%, 0.080%, 0.100% or 0.125% per annum of the amount of lender commitments, depending on the Company's unsecured long-term debt ratings.

As of the date of this filing, the Company's unsecured long-term debt is rated BBB by S&P, Baa2 by Moody's and A- by Fitch, and, accordingly, the Applicable Margin for Eurodollar Rate Advances at this time is 1.025% and the facility fee applicable at this time is 0.100%. S&P, Moody's and Fitch may change their ratings at any time, and the Company disclaims any obligation to provide notice of any changes to these ratings.

In the event that the Company's unsecured long-term debt ratings are split by S&P, Moody's and Fitch, then the Applicable Margin for Eurodollar Rate Advances, the Applicable Margin for Base Advances or the facility fee, as the case may be, will be determined by the highest of the three ratings, except that in the event the lowest of such ratings is more than one level below the highest of such ratings, then the Applicable Margin for Eurodollar Rate Advances, the Applicable Margin for Base Advances or the facility fee, as the case may be, will be determined based on the level that is one level above the lowest of such ratings.

The obligations of the lenders under the 2025 Credit Agreement to provide advances to the Company will terminate on November 17, 2025, unless the commitments are terminated in whole prior to that date. The obligations of the lenders under the 2023 Agreement to provide advances to the Company will terminate on December 11, 2023, unless the commitments are terminated in whole prior to that date. All advances must be repaid no later than the date on which lenders are no longer obligated to make any advances under the applicable Revolving Credit Agreement.

Each of the Revolving Credit Agreements provides that the Company and lenders representing more than 50% of the facility amount may agree to extend their commitments under such Revolving Credit Agreement for two one-year periods beyond the initial termination date. The Company has the right to terminate, in whole or in part, amounts committed by the lenders under each of the Revolving Credit Agreements in excess of any outstanding advances; however, any such terminated commitments may not be reinstated.

The Revolving Credit Agreements also provide that the Company may request that the aggregate amount of the commitments of the lenders under either Revolving Credit Agreement be increased by an integral multiple of $25 million to be effective as of a date that is at least 90 days prior to the scheduled termination date then in effect, provided that in no event shall the aggregate amount of the commitments of the lenders under both Revolving Credit Agreements at any time exceed $17 billion.

The Revolving Credit Agreements contain certain representations and warranties and covenants, including a limitation on liens covenant and, beginning in the first full fiscal quarter ending after the closing date, a net debt-to-EBITDA financial ratio covenant that the Company will maintain, as of the last day of each fiscal quarter, a ratio of not more than 3.5 to 1 of:



    (A)  all items that would be treated under accounting principles generally
         accepted in the United States ("GAAP") as specified in the Revolving
         Credit Agreements as indebtedness on the Company's consolidated balance
         sheet minus the amount by which the sum of (i) 100% of unrestricted cash
         and cash equivalents held by the Company and its subsidiaries in the
         United States,

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        and funds available on demand by the Company and its subsidiaries in the
        United States (including but not limited to time deposits), and (ii) 65%
        of unrestricted cash and cash equivalents held by the Company and its
        subsidiaries outside of the United States, exceeds $2 billion in the
        aggregate (or the avoidance of doubt, any cash and cash equivalents held
        by the Company and its subsidiaries outside of the United States shall
        not be considered "restricted" solely as a result of the repatriation of
        such cash and cash equivalents being subject to any legal limitation or
        otherwise resulting in adverse tax consequences to the Company), to




    (B)  the net income of the Company and its consolidated subsidiaries,
         determined on a consolidated basis for the four quarters then ended in
         accordance with GAAP, adjusted to exclude the effects of (a) gains or
         losses from discontinued operations, (b) any extraordinary or other
         non-recurring non-cash gains or losses (including non-cash restructuring
         charges), (c) accounting changes including any changes to Accounting
         Standards Codification 715 (or any subsequently adopted standards
         relating to pension and postretirement benefits) adopted by the Financial
         Accounting Standards Board after the date of the applicable Revolving
         Credit Agreement, (d) interest expense, (e) income tax expense or
         benefit, (f) depreciation, amortization and other non-cash charges
         (including actuarial gains or losses from pension and postretirement
         plans), (g) interest income, (h) equity income and losses and (i) other
         non-operating income or expense. In the event the Company makes a
         Material Acquisition or a Material Disposition (each as defined in the
         applicable Revolving Credit Agreement) during the relevant four quarter
         period, pro forma effect will be given to such material acquisition or
         material disposition, as if such material acquisition or material
         disposition occurred on the first day of such period.

The Amendment amended, among other things, certain events of default under the 2023 Credit Agreement. Events of default under either Revolving Credit Agreement, which, if occurring after the advances are made, would result in the acceleration of or permit the lenders to accelerate, as applicable, required payment under such Revolving Credit Agreement and which would increase the Applicable Margin for Eurodollar Rate Advances and the Applicable Margin for Base Advances by 2.00% per annum, whether automatically or upon the request of the requisite lenders under such Revolving Credit Agreement, as applicable, include the following:

• Failure by the Company or its material subsidiaries to pay principal or

          interest, fees or other amounts under such Revolving Credit Agreement
          beyond any applicable grace period;



• Material breaches of representations and warranties in such Revolving

          Credit Agreement;



• Failure to comply with the preservation of corporate existence,

          visitation rights or reporting requirements specified under such
          Revolving Credit Agreement;



• Failure to comply with the negative covenants or the net debt-to-EBITDA

          ratio covenant described above;



• Failure to comply with other covenants under such Revolving Credit

          Agreement for a specified period after notice;




     •    Failure by the Company or its material subsidiaries, as applicable, to
. . .

ITEM 2.03 Creation of a Direct Financial Obligation or an Obligation Under an

Off-Balance Sheet Arrangement of a Registrant

The disclosure under Item 1.01 is incorporated by reference into this Item 2.03.

--------------------------------------------------------------------------------

ITEM 9.01 Financial Statements and Exhibits.



(d) Exhibits



10.1      U.S.$7,500,000,000 Amended and Restated Credit Agreement, dated as of
        November 17, 2020, among AT&T Inc., the lenders named therein and
        Citibank, N.A., as agent.

10.2      Amendment No. 1 to the $7,500,000,000 Five Year Credit Agreement, dated
        December 11, 2018, among AT&T, certain lenders named therein and Citibank,
        N.A., as agent.

104     Cover Page Interactive Data File (embedded within the Inline XBRL
        document)

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© Edgar Online, source Glimpses

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