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AT&T Stock, Bond Prices Climb After Discovery Deal

美国电话电报公司股票,债券价格在Discovery交易后攀升

2021/05/18 00:20  Dow Jones Newswires

DJ AT&T Stock, Bond Prices Climb After Discovery Deal


By Sebastian Pellejero and Nina Trentmann

AT&T Corp.'s stock and bond prices rose Monday after the telecommunications company and Discovery Inc. said they plan to combine their media assets into a new publicly traded company.

AT&T's shares rose 1.9% after the announcement, which would spin off the company's WarnerMedia division, unwinding a big bet on entertainment just three years after it acquired the owner of Time Warner Inc. for about $81 billion.

Bond prices rose, with analysts saying the deal would help reduce the $169 billion in net debt AT&T reported at the end of March. AT&T is the most-indebted nonfinancial U.S. company, according to FactSet data, raising worries for some about the conglomerate's financial flexibility.

AT&T said it would receive $43 billion from the deal in a combination of cash, debt securities and WarnerMedia's retention of certain debt. The company also plans to reduce its dividend and intends to use some of the funds to bring down debt.

The deal will help address investors' concerns, AT&T Chief Financial Officer Pascal Desroches said. AT&T expects its ratio between net debt and earnings before interest, tax, depreciation and amortization will hit 2.5 times by the end of 2023 -- ahead of its previous goal of 2024, Mr. Desroches said. "This checks a lot of boxes," he said, referring to the transaction. "This is a very good move for equity holders...and bondholders of AT&T," Mr. Desroches said.

A $7.5 billion AT&T bond due in 2053 recently traded for 93.696 cents on the dollar, according to MarketAxess, translating to an extra yield, or spread, above U.S. Treasurys of 1.48 percentage points. The same bond traded Friday at 91.7 cents for a 1.59 percentage point spread. A smaller spread signals a lower perceived risk of default.

"AT&T has been clear that debt reduction is a primary focus for the company," wrote CreditSights analysts in a note Monday. "We believe AT&T should receive significant cash back in the deal, with the large majority to be used for debt repayment."

Discovery's Class A shares fell 1.8%. A $1.7 billion bond due in 2055 traded with a spread of 1.76 percentage points, little changed from Friday.

The spinoff is the latest in a series of deals by AT&T Chief Executive John Stankey to refocus the company on its core telecommunications businesses. Earlier this year, the company sold a 30% stake in DirecTV to private-equity group TPG in a deal that valued the television division at a third of what AT&T had purchased it for six years ago.

The combination of WarnerMedia and Discovery's assets will create the second largest media company in the world behind Walt Disney Co. It could include access to AT&T's CNN, HBO, TBS, TNT and Warner Bros.' studios, along with Discovery's HGTV, Food Network, TLC and Animal Planet. The new combined company will have an enterprise value of about $152 billion, including $56 billion in debt.

"The greater the content choice offered to subscribers, the greater the success of the service over the long-term," said Bank of America analysts in a note. That larger scale and reduced exposure to the costs of investing in new content could benefit AT&T shareholders, they added, who will own 71% of the new entity.

At the same time, some analysts were surprised to see AT&T choose a tax-free spinoff, which limits the amount of cash proceeds and net debt reduction that the company can extract from the deal. The structure accelerates the timing of AT&T returning to a company focused on communications and improves the company's flexibility to invest in its wireless and fiber networks.

"We are structuring it in a very tax-efficient way," Mr. Desroches said.

To account for the distribution of WarnerMedia assets into a new company, AT&T has disclosed that it expects to cut its annual dividend by 45% to 50% from the current level, according to estimates from Citibank. That would remove AT&T from the list of so-called dividend aristocrats, or companies that have increased their base dividend payout for each of the past 25 years. AT&T's dividend will still be healthy after the reduction, Mr. Desroches said.

"We believe that alternative structures could have opened the door to great financial flexibility for AT&T to sustain the dividend, but the execution and unwinding of the [equity] stake would likely have taken significant time," Citi analysts wrote in a Monday note.

Sam Goldfarb contributed to this article.

Write to Sebastian Pellejero at sebastian.pellejero@wsj.com and Nina Trentmann at Nina.Trentmann@wsj.com

(END) Dow Jones Newswires

May 17, 2021 12:20 ET (16:20 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

DJ AT&T股票,债券价格在Discovery交易后攀升


塞巴斯蒂安·佩莱杰罗(Sebastian Pellejero)和妮娜·特伦特曼

美国电话电报公司(AT&T Corp.)股价和债券价格周一上涨,此前这家电信公司和Discovery Inc.表示,他们计划将两家媒体资产合并为一家新的上市公司。

宣布这一消息后,AT&T的股价上涨了1.9%,这将剥离该公司的WarnerMedia部门,解除对娱乐业的巨额押注。三年前,AT&T以约810亿美元收购了时代华纳(Time Warner Inc.)的所有者。

债券价格上涨,分析师表示,这笔交易将有助于减少美国电话电报公司(AT&T)3月底公布的1,690亿美元净债务。根据FactSet的数据,美国电话电报公司(AT&T)是美国负债最高的非金融公司,这引发了一些人对该集团财务灵活性的担忧。

AT&T表示,它将从这笔交易中获得430亿美元,其中包括现金、债务证券和WarnerMedia保留的某些债务。该公司还计划减少股息,并打算将部分资金用于降低债务。

AT&T财务长Pascal Desroches称,这笔交易将有助于化解投资者的担忧。德斯罗奇说,AT&T预计,到2023年底,其净债务与利息、税项、折旧及摊销前利润(EBITDA)之比将达到2.5倍,高于此前2024年的目标。他指的是这笔交易,他说:“这让人大吃一惊。”“这对AT&T的股权持有者和债券持有者来说是一个非常好的举动,”德斯罗奇说。

根据MarketAxess的数据,美国电话电报公司(AT&T)2053年到期的75亿美元债券最近的交易价格为面值的93.696%,这意味着收益率(或利差)比美国国债高出1.48%。同样的债券周五的交易价格为91.7美分,利差为1.59个百分点。利差越小,表明人们感知到的违约风险越低。

CreditSights的分析师周一在一份报告中写道:“AT&T已经明确表示,削减债务是公司的首要任务。”“我们认为AT&T应该会在这笔交易中获得可观的现金返还,其中绝大多数将用于偿还债务。”

Discovery的A类股下跌1.8%。2055年到期的17亿美元债券的交易利差为1.76个百分点,与上周五相比变化不大。

此次剥离是美国电话电报公司(AT&T)首席执行长斯坦基(John Stankey)为重新将公司重点放在核心电信业务上而进行的一系列交易中的最新一笔。今年早些时候,该公司将DirecTV 30%的股份出售给私募股权集团TPG,这笔交易对电视部门的估值是美国电话电报公司(AT&T)六年前收购该部门的三分之一。

华纳传媒与Discovery的资产合并后,将缔造仅次于华特迪士尼公司(Walt Disney Co.)的全球第二大媒体公司,其中可能包括美国电话电报公司(AT&T)旗下的CNN、HBO、TBS、TNT和华纳兄弟(Warner Bros)。制片厂,以及探索频道的HGTV、美食电视网、TLC和动物星球。合并后的新公司的企业价值约为1,520亿美元,其中包括560亿美元的债务。

美国银行(Bank Of America)分析师在一份报告中表示:“向订户提供的内容选择越多,从长远来看,这项服务的成功就越大。”他们补充说,更大的规模和对新内容投资成本的降低可能会让AT&T的股东受益,他们将拥有新实体71%的股份。

与此同时,一些分析师惊讶地看到AT&T选择免税剥离,这限制了该公司可以从这笔交易中提取的现金收益和净债务削减的金额。这一结构加快了AT&T回归一家专注于通信的公司的时机,并提高了该公司投资于无线和光纤网络的灵活性。

“我们正在以一种非常节税的方式来构建它,”德斯罗奇说。

据花旗银行(Citibank)估计,为了将WarnerMedia资产分配给一家新公司,美国电话电报公司(AT&T)透露,预计年度股息将在目前水平上削减45%至50%。这将把AT&T从所谓的股息贵族名单中删除,也就是过去25年来每年都增加基本股息支出的公司。德斯罗奇说,削减股息后,AT&T的股息仍将保持健康。

我们认为,替代结构本可以为AT&T打开巨大的财务灵活性之门,以维持股息,但执行和解除[股权]花旗分析师在周一的一份报告中写道:“入股可能需要相当长的时间。”

萨姆·戈德法布对这篇文章也有贡献。

写信给sebastian.pellejero@wsj.com的塞巴斯蒂安·佩莱杰罗(Sebastian Pellejero)和尼娜·特伦特曼(Nina Trentmann)的电子邮件Nina Trentmann@wsj.com

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2021年5月17日美国东部时间12:20(格林尼治标准时间16:20)

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