AT&T Global Notes Priced

As was somewhat expected the pricing for the new AT&T Global Notes came at 5.625%.

The older issue of Global Notes (NYSE:TBB) has a coupon of 5.35% and today took quite a tumble (shown below) after the new issue was announced.




The new issue will trade on the NYSE, but there will not be OTC Grey Market trading.  The new ticker has not been announced.

The pricing term sheet can be seen here.

The new issue has the normal terms–quarterly interest payments which are not qualified distributions (for tax purposes) and an early redemption period starting in August, 2023.

 

20 thoughts on “AT&T Global Notes Priced”

  1. Thanks for the update Tim. Considering these are basically 50 year notes, I’m going to pass as the coupon rate is too low for me.

    1. What are you finding is a ‘good value’ these days, Kaptain?

      Slim pickings out there… Sad to see my BGCA up on the chopping block pretty soon.

      1. G,

        I am having a hard time finding bargains out there right now. This past year I was a large buyer of CDR preferreds as they really sold off in price but have now partially recovered. CDR-B still has some value and goes ex-dividend on 8/9 and is callable at anytime at $25.
        At the current price level, I still like GNL-A trading around $25.18. Plus, the 6.75% UBP-G right around par. All three of these securities are nice to hold in a retirement account, as there is no tax to pay until funds are taken out of the account. I also hold some of all in my regular brokerage account. While the rules have not been 100% clarified for 2018, 20% of the dividends should be exempt from federal income tax – so still a decent return if investors are in lower tax brackets.

        1. I have GNL-A and UBP-G on my watch list as potentials too.. true not many “bargains” that’s for sure.. bests, Bea

      2. G – and for those of us not afraid to take a little risk in the shipping sector, I like CMRE-E. It’s trading at about $25.20 today and has a nice yield of about 8.8%. However, many investors prefer to avoid the sector.

        1. Im pulling out an old trick that I have used a few times and it has always worked for a decent hit and run. I bought up some more DCP-B yesterday to go with my par purchase. Its the “people are dumb” trade. DCP-B now has the quarterly dividend post going exD at end of August. It is 67.8 cents which equates to a 10.74% yield. Except it isnt…Its a bloated extra ~18 cent one time payment due to when it went to market. Buyers dont always notice that and just see the annualized yield. As it approaches exD it should climb a bit. And no, this is no recomendation, there is a dearth of opportunites for me so I am going to try this again.

        2. Thanks Lou and Bea.

          The financials of CDR made me sit back in my chair! Oy! I then hit their website and looked at the properties they own and what is ‘anchored’ in them . I saw Peebles, Acme, Big Lots, and some fronts that looked like had already been repurposed Walgreens.

          The recent upswing on the chart correlates to the upswing in the general REIT universe, as of the past few months – but I’d expect the Fed to slap the brakes on that pretty soon.

          Already grabbed the UBP-G and am happy with it thus far, so I agree with you on that one for now.

          GNL-A is rather interesting. Their geographic diversity as well as industry diversity is very compelling. They’ve really spread out the risk, but that can also come back to bite you as well. Nonetheless, the preferred has been quite stable, all things considered within the REIT universe.

          Thanks for some good ideas. Much appreciated!

          1. I own both UBP-G and UBP-H. Both positions are small, but was wondering about the wisdom of holding both issues.

            Am leaning toward dumping UBP-H as it’s lower yield ( but call protection still on ). Am just at breakeven after accounting for the dividend to be received next week.

            Comments appreciated. Hold or fold? And if fold, which one?

          2. G – As a resident of PA, I know where a lot of the CDR properties are located and know some of their tenants and am fine with my investment in the company. According to the last annual SEC report, they have $1.5 billion in property at cost ( I am not backing off depreciation, as I think the properties are worth their cost value) and about $600 million in debt. That gives me a debt to undepreciated ratio of about 40%. However, they do have a fair amount of preferred stock – which is my holding in the company. Plus, their #1 tenant is Giant Foods, which is a subsidiary of Ahold and they have investment grade ratings.

            Yes, a few tenants I don’t like but their top 20 tenants are good. I’ve been a preferred stock holder of the company for well over 12 years with various preferred issues and have never been concerned about repayment.

        3. My toes in the shipping industry are wet with TNP-D right now. So far so good. I’ll take a look at the CMRE offerings, though. Thanks again!

          1. Thanks for the additional thoughts, KLou. Always goood to have a perspective from someone who actually lives around some of the properties and knows the traffic flows and actual conditions of the properties – as well as the local type of clientele. All valuable input…

  2. Inspbudget, you and I go way back now, and you know what I am going to say….If the choice was between the 2 you sell the G and buy the H. Take the back side price support of the higher yield and use the approaching call date as an added crutch for price support. We arent in a rate environment of decreasing yield and trying to hang on to lower yielding fruit. Its the opposite, reach for as high as yield within ones safety parameters and hang on, if perpetual preferreds are of your liking which they are, lol. The yield of UBP-H is as common as dirt and you can find many issues of the same quality and yield as H provides…..But you know me…I am from the land of “bring it on big boy, I dare you to call”…..I just bought a few hundred shares of an issue that is 15 years past call and $3.50 above par.

    1. Ooops, wrote it wrong at beginning but you probably figured it out,.. Inspbudget… Its sell the H and buy the G….

      1. Grid is right about this one. I would dump the H and buy the G shares. Today I picked up more UBP-G at around $25.05 in my retirement account. Limited downside risk in the G shares as they could always be called if the company does not want to pay the 6.75% in the future. Happy investing!

        1. I agree on keeping the G flavor.

          Other options would be to look at VER.F or STAG.C, or SHO.E if you want to stay in the REIT space. Heck, also add in SOHOO and GAINO also, for that matter.

          1. Thanks to Grid, Kaptain Lou and G who responded to my question.

            You gurus have confirmed that my “gut” feel for selling UBP-H was correct, and that is the way I’m heading now. Will sell the -H and use proceeds to add more -G.

            Good to hear G mention SOHOO and STAG-C; I own both issues.

    1. True, DaveR, but they also just issued more notes and thus, burying that credit rating even further in the downgrade department. They’ve got to eat what’s on their plate and STOP buying more ‘stuff’.

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