AT&T Debt Offering Will Help It Swallow DirecTV

AT&T could issue as much as $7.5 billion in debt to help pay for its $49 billion acquisition of DirecTV, analysts say, which would rank as the fifth-largest high-grade corporate-bond sale in the US this year.

AT&T plans to pay for the acquisition with 70% of it in stock and 30% in cash. The company said the cash component will be financed "through a combination of cash on hand, sale of noncore assets, committed financing facilities and opportunistic debt market transactions." AT&T could sell its new bonds sometime in the next few months, to take advantage of rates that still remain relatively low, with a requirement to buy the debt back from investors if the DirecTV deal doesn't close. Investors have been snapping up new corporate bonds recently, as buyers look to investments that offer more yield than benchmark US Treasurys.