Baa2/BBB/BBB+ EUR spreads look mixed and muted

Announcement comes as per the leaks on Friday and earlier in Sept. Amounts are small in terms of deleveraging potential (<0.2x) though continued receipt of DIRECTV cashflows through to 2025 provides some stability (DIRECTV should contribute ~17% of FY24 FCF based on BBG consensus).

• • TPG will pay AT&T USD 2bn (less deductions) in 2025, plus an additional USD 500mn in 2029.
• • AT&T expects total cash receipts of USD 7.6bn from DIRECTV and TPG by 2029; continued expectation of USD 3bn in DIRECTV distributions in the aggregate for 2024 (o/w USD 1.7bn in H224) and USD 2.8bn in 2025.
• • Agreement contemplates that DIRECTV will issue a special distribution of at least USD 1.625bn to equity holders by Q125 of which AT&T should receive ~70%.
• • Deal closure expected H2 2025, pending regulatory approvals.