Terms

Series

% Perpetual Preferred Stock, Series A

Liquidation Preference

$25.00

Rate Type

Fixed

Payment Frequency

Quarterly

Cumulative

Yes

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

December 1, 2024

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Debt Obligations Of At&T Inc.; Pari Passu With: Parity Stock (Other Series Of Preferred Stock On Equal Ranking); Senior To: Common Stock, Junior Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Prospectus Summary

AT&T Inc. is offering depositary shares, each representing a 1/1,000th interest in a share of its Perpetual Preferred Stock, Series A, with a liquidation preference of $25.00 per depositary share ($25,000 per underlying preferred share). The coupon rate was not finalized at the time of this preliminary prospectus supplement (filed December 5, 2019), but dividends are fixed-rate, cumulative, and payable quarterly in arrears on February 1, May 1, August 1, and November 1, commencing February 1, 2020. Because the Series A is cumulative, any unpaid dividends accrue and must be paid in full before AT&T can resume dividends on junior securities, protecting investors from permanent loss of income through deferral. The Series A ranks senior to AT&T's common stock and any other junior stock with respect to dividends and liquidation distributions, and on a parity with any other series of preferred stock designated as such. As a holding company issue, it is structurally subordinated to all debt at both the AT&T Inc. holding company level and at its operating subsidiaries, meaning creditors of those subsidiaries are paid first in any insolvency. Notably, AT&T may redeem the entire Series A (but not partially) at $25.50 per depositary share within 90 days following any 'ratings event' — a determination by a rating agency that the preferred receives less equity credit than at issuance — which could force holders to reinvest at potentially less favorable terms. The exact coupon and effective yield at the $25.00 liquidation preference were not disclosed in this preliminary filing. Dividends are paid quarterly on February 1, May 1, August 1, and November 1. For individual U.S. holders meeting applicable holding period requirements, dividends are expected to qualify as 'qualified dividend income' subject to the preferential 15%/20% federal tax rate; corporate holders should be eligible for the dividends-received deduction, subject to Section 246A limitations. AT&T's dividend stopper provision prohibits any dividend or repurchase on common stock or other junior securities unless all accrued Series A dividends have been paid in full or set aside, providing a meaningful structural protection for preferred holders.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If AT&T has not paid or set aside full accrued dividends on the Series A through the most recently completed dividend period, it cannot pay dividends on or repurchase its common stock or any other stock ranking junior to the Series A, with limited exceptions for reclassifications, reinvestment-funded repurchases, and employee benefit plan repurchases.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 60 (Average)