AT&T Wireless issues $3 billion bond offering

AT&T Wireless expects to close April 16 on a $3 billion bond sale consisting of $250 million in 6.875% three-year notes, $750 million in 7.5% five-year notes and $2 billion in 8.125% 10-year notes. The company’s long-term debt is rate Baa2 by Moody’s Investors Service, and BBB by both Standard & Poor’s and Fitch Ratings.

Industry sources said AT&T Wireless would raise the full amount, despite speculation that that company would have be forced to settle for about $2.5 billion. “The offering was dramatically oversubscribed,” said one source, adding that the bond offering had been factored into the company’s business plan for 2002.

“They just had to find the right opening, the right window, at the right time to go into the corporate bond market,” said the source, adding that AT&T Wireless is expected to use the cash to meet business expenses over the next 12 to 18 months.

In other news, the company refuted published reports that it was committing to the launch of 3G services by 2004.

“I don't think we have written out a specific timetable for 3G,” said an AT&T Wireless spokesman. “This year, in the parlance of the industry, we will move toward 2.5G, which for us means the rollout of GSM and GPRS.”

The spokesman added that AT&T Wireless is “about 45 percent upgraded to that. That is our footprint. We have made a public commitment to being 100 percent upgraded this year, and we will meet that commitment. We have that stake in the ground.”

Though the company will start to test EDGE software later in the year, bringing it even closer to 3G capabilities, the evolution to next-generation services “is something that's going to play out over time.” Consequently, AT&T Wireless isn’t prepared to commit to 2004 as a specific date for the completion of its migration to 3G, said the spokesman.

--Glenn Bischoff, Senior News Writer