AT&T INC. ITEM 1.01 Entry into a Material Definitive Agreement.
On
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
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
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.
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ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits 10.1U.S. $7,500,000,000 Amended and Restated Credit Agreement, dated as ofNovember 17, 2020 , amongAT&T Inc. , the lenders named therein andCitibank, N.A ., as agent. 10.2 Amendment No. 1 to the$7,500,000,000 Five Year Credit Agreement, datedDecember 11, 2018 , amongAT&T , certain lenders named therein andCitibank, N.A ., as agent. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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