ITEM 1.01 Entry into a Material Definitive Agreement.
On December 11, 2018, AT&T Inc. (the Company) entered into a $7.5 billion Amended and Restated Credit Agreement (the Amended
and Restated Credit Agreement), with Citibank, N.A., as agent, amending and restating the Companys existing $12 billion Amended and Restated Credit Agreement, dated as of December 11, 2015. On December 11, 2018, the
Company also entered into a $7.5 billion Five Year Credit Agreement (the Five Year Credit Agreement and, together with the Amended and Restated Credit Agreement, the Credit Agreements), with Citibank, N.A., as agent. In
the event advances are made under the Credit Agreements, those advances would be used for general corporate purposes.
Advances under each of the Credit
Agreements will bear interest, at the Companys option, either:
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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 Citibanks 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 Credit Agreement (the Applicable Margin for Base Advances); or
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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 Credit Agreement (the Applicable Margin for Eurodollar Rate Advances).
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The Applicable Margin for Eurodollar Rate Advances under each of the Credit Agreements will be equal to 0.680%, 0.920%, 1.025% or 1.125% per annum depending
on the Companys 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 Companys 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 Companys unsecured long-term debt ratings.
As of the date of this filing, the Companys unsecured
long-term debt is rated BBB by S&P, Baa2 by Moodys 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, Moodys 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 Companys unsecured long-term debt ratings are split by S&P, Moodys 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 Amended and Restated Credit Agreement to provide advances to the Company will terminate on December 11, 2021,
unless the commitments are terminated in whole prior to that date. The obligations of the lenders under the Five Year Credit 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 Credit Agreement.
Each of the Credit Agreements provides that the Company and lenders representing more than 50% of the facility amount may agree to extend their commitments
under such 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 Credit
Agreements in excess of any outstanding advances; however, any such terminated commitments may not be reinstated.
The Credit Agreements also provide that
the Company may request that the aggregate amount of the commitments of the lenders under either 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 Credit Agreements at any time exceed $17 billion.