20 thoughts on “AT&T Prices Preferred Issue”

  1. Does anyone know whether this is a baby bond or a regular preferred?

    1. It’s perpetual so I don’t imagine it fits the definition of a baby bond. I don’t care what they call it I look at the parameters.

    2. Its capital stock… Traditional preferred. It is on the books as equity asset. A baby bond is a debt and a liability.

  2. Seems to me if you like this company the common stock is yielding 5.35%. That seems like a better option.

    1. I agree, the Common is a much better option here. AT&T is a dividend aristocrat with has 34 years of consecutive INCREASES. The Common stock may have some additional volatility versus the Preferred stock, but its dividend yield is starting off at more than the Preferred yields, and the Common’s dividend will continue to grow and there is decent upside potential for the price of the Common based on 5G alone.

      Even without 5G, the company is being pushed to dump losers and get its house in order by the likes of Elliot Management.

      1. But then maybe the common isn’t when you consider the preferred is QDI and has a tad less volatility than the common which is not QDI.

        1. Mikeo, what makes you think that the dividends from AT&T common stock are not QDI??? Of course they are.

        2. Mikeo, the common is QDI, generic by the basic definition common stocks are QDI. They both are capital stock assets on the same ledger.
          Many people get confused on the QDI, or its genesis, but its really basic for most companies. If it is a dividend paying C Corp (not reit, or MLP, etc) and the company has profits or retained income on balance sheet the preferred and/or the common will both be QDI. The money is coming from the same after taxed pot from corporation on capital ledger side, who has already paid taxes on that money.

      2. Tom, This is a relative odd one and slightly defies the historical purpose of a traditional higher quality QDI stock. Typically the preferred stock is issued with a modestly higher yield and step up in payment security. While the trade off is no stock price growth or dividend increases the common would enjoy if company prospers.
        Here one gets a lower yield for the payment security. One loses half the benefit off the bat if one assumes T’s dividend is safe. Everyone has their own goals and needs so I get that. But the big winner here is T selling these. As this is capital stock on the balance sheet just like the common. A smart issuance from T perspective here.
        If one has been around the preferred scene a longer while, we are beginning to see things turn full circle again. In recent times a preferred QDI issuance was either from a financial or a higher risk company needing capital.
        Now more higher quality companies are beginning to take advantage of lower yields to issue preferreds again. Utilities are also being more active here again. This is not unusual from a historic basis though…Exxon, IBM, AT&T (the real one, not todays AT&T that is really Southwestern Bell), etc. all had preferred stock back in the day.

  3. Just saw this on the Fidelity web site;
    Fitch Affirms AT&T’s Long-Term IDR at ‘A-‘; Rates Preferred ‘BBB’; Outlook Stable

    1. Sorry but A- from Fitch is cray-cray. I wouldn’t give em more than BBB positive outlook. If they successfully execute on deleveraging plans I’ll consider upgrading them.

      But love my KTBA.

  4. Wow, this is a case of T getting a big bonus for “the name”. Split IG should be more like 5.25 and possibly higher considering this is their first preferred. Makes KTBA near 6% look all the better.

    1. I agree Landlord–it is disappointing–yet expected because of the ‘name’.

      1. twitter today is offering 2027 bonds at 3.875 wow i now am thinking 5 is pretty darn good

        1. I picked up a couple of hundred for my Taxable account at Fidelity for $24.90.

        2. Twitter?

          That place is a garbage fire, and I know because I use it. No way I am investing in their debt — and at that rate! Yikes!

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