By Charles Mead; Bloomberg Businessweek ~ Feb 07, 2013

AT&T Inc. (T) plans to sell bonds in a benchmark offering that may include its first floating-rate notes in almost five years.

The biggest U.S. phone company may issue three-year notes with a coupon linked to the London interbank offered rate, similar-maturity fixed-rate debt or a combination of the two, according to a person familiar with the Dallas-based company’s transaction, who asked not to be identified, citing lack of authorization to speak publicly.

A sale of so-called floaters would be AT&T’s first since March 2008, when it issued $2 billion of two-year securities paying 45 basis points more than Libor, and follow an International Business Machines Corp. offering this week of notes that paid less than the benchmark interest rate.

Libor, the rate at which banks say they can borrow from one another in dollars, is the standard for about $360 trillion of financial products. Benchmark offerings are typically at least $500 million.

AT&T’s $1.75 billion of 2.95 percent notes due May 2016 traded at 106 cents on the dollar on Feb. 5, yielding 1.08 percent, or 69.4 basis points more than similar-maturity Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

To contact the reporter on this story: Charles Mead in New York at cmead11@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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