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AT&T eyes bond offering
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October 29, 2001: 12:38 p.m. ET
Telecom looking to refinance debt despite downgrade; may retain cable unit.
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NEW YORK (CNNmoney) - AT&T Corp. is eyeing a bond offer of between $5 billion and $7 billion, despite a recent downgrade in its debt, according to a published report.
The Wall Street Journal reported Monday that the telecommunications company would be looking to use the bond issue to refinance about $6.5 billion in short-term debt, most of which is due in the next 90 days.
Shares of AT&T (T: down $0.35 to $15.66, Research, Estimates), a component of the Dow Jones industrial average, were off about 2 percent in trading Monday.
Moody's Investors Service, one of the nation's key credit rating agencies, last Thursday lowered its ratings on long term debt issued or guaranteed by AT&T Corp. to A3 from A2, and lowered its rating on its debt from its broadband operations to Baa1 from A3. Those lower ratings can raise the cost of borrowing.
The Journal's report, quoting unnamed "people close to the situation" said that AT&T executives are confident they can refinance that debt despite the lower ratings.
A spokeswoman for AT&T declined to comment on the Journal's report on refinancing.
The Journal also said AT&T was considering hanging onto its broadband unit. The company had announced plans to spin off broadband to shareholders next year through a tracking stock, but an unsolicited $44 billion stock bid for the unit from cable operator Comcast Corp. (CMCSA: down $0.77 to $36.01, Research, Estimates) prompted AT&T to put the plans on hold.
Plans for the spinoff have always and still are on the table, a source told CNNmoney, as the nation's No. 1 long distance phone provider looks at various options for the unit. The company is expecting bids from potential suitors for the unit by the end of November.
Last week, AT&T ousted Dan Somers as head of the broadband unit, replacing him with William Schleyer. Somers' successor could give AT&T ammunition to launch a tracking stock for the cable business, analysts said.
"There's not a requirement to have to sell the cable business if there's not a great deal," the WSJ quoted an unnamed person familiar with the situation as saying.
An AT&T spokeswoman also refused to prospects for the broadband business. 
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