SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
July 1, 2002
Date of report (Date of earliest event reported)
AT&T CORP.
(Exact Name of Registrant as Specified in Charter)
NEW YORK 1-1105 13-4924710
(State or Other (Commission File (IRS Employer
Jurisdiction Number) Identification No.)
of Incorporation)
295 North Maple Avenue, Basking Ridge, New Jersey 07920
(Address of Principal Executive Offices, including Zip Code)
(908) 221-2000
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
Certain Financing Activities
On July 1, 2002, AT&T announced that it had successfully completed the
initial phases of three separate financing initiatives. First, AT&T secured
initial commitments for a new bank facility. In addition, the company renewed
its Business Services customer accounts receivable securitization facility. And
finally, the company's filing to register the U.S. dollar denominated private
placement notes previously issued was declared effective by the Securities and
Exchange Commission.
AT&T said it has received initial commitments from Citibank, Credit
Suisse First Boston, Goldman Sachs and JP Morgan for a significant portion of a
new bank facility of up to $4 billion. The banks have also agreed to act as lead
arrangers to syndicate the balance of the 364-day credit facility. Completion of
this transaction is subject to customary closing conditions.
The proposed new bank facility will replace AT&T's existing undrawn $8
billion facility, which matures in December 2002. The company noted that its
successful deleveraging activities and short-term debt reduction efforts have
contributed to its ability to halve the amount of the bank facility it requires.
AT&T reduced its short-term debt, net of cash and excluding the current portion
of monetization debt, to $2.4 billion as of March 31, 2002 -- a reduction of
$27.1 billion from December 31, 2000. The new facility is expected to be
adequate to back up any AT&T commercial paper or other short-term debt maturing
over the course of the next year.
AT&T said the new credit facility would remain in effect following the
spinoff of AT&T Broadband and the close of its proposed merger with Comcast
Corporation.
Additionally, AT&T said it renewed its Business Services customer
accounts receivable securitization facility, and in the coming weeks expects to
renew its Consumer Services customer accounts receivable securitization
facility, under which approximately $200 million is currently drawn. The
Business Services facility will provide up to $1.65 billion of financing, based
on the eligible receivables balance, which varies from month to month. While the
term of this facility was extended to June 2003, it is currently undrawn.
Finally, AT&T also said the SEC has declared effective the company's
filing to register the $7 billion of U.S. dollar denominated notes issued in the
November 2001 $10 billion global private placement note offering. The remaining
$3 billion of notes are Euro denominated and are not subject to SEC
registration.
Certain Matters Relating to Adelphia Partnerships
On June 25, 2002, three cable partnerships (the "Partnerships") between
subsidiaries of AT&T and subsidiaries of Adelphia Communications Corporation
("Adelphia") commenced bankruptcy proceedings by the filing of chapter 11
petitions in the Bankruptcy Court for the Southern District of New York at about
the same time that other Adelphia entities filed for bankruptcy. These
partnerships are: Century-TCI California Communications, L.P. (in which AT&T
holds a 25% interest through a wholly owned subsidiary and which as of December
31, 2001 had an aggregate of approximately 775,000 subscribers in the greater
Los Angeles, California area), Parnassos Communications, L.P. (in which AT&T
holds a 33.33% interest through a wholly owned subsidiary) and Western NY
Cablevision, L.P. (in which AT&T holds a 33.33% interest through a wholly owned
subsidiary and which as of December 31, 2001 had, together with Parnassos
Communications, L.P., an aggregate of approximately 470,000 subscribers in
Buffalo, New York and the surrounding areas). AT&T cannot predict what the
outcome or impact of these proceedings will be.
Certain Matters Relating to Time Warner Entertainment Partnership
On July 1, representatives of Comcast Corporation ("Comcast") and AT&T
met with representatives of the Federal Communications Commission (the "FCC").
Comcast affirmed its desire that AT&T's limited partnership interest in Time
Warner Entertainment be divested as soon as possible, consistent with
realization of the asset's market value. Noting that AT&T and Comcast had stated
in their merger application that, if divestiture could not be effectuated prior
to closing, AT&T and Comcast would insulate the interest and take such
additional steps, if any, as may be appropriate to ensure that AT&T Comcast
would not be able to influence the operation or management of TWE prior to its
ultimate sale, Comcast advised the FCC officials that AT&T and Comcast are
willing not only to insulate the interest in TWE but also to place AT&T's
interest in TWE into an irrevocable trust. Both events would occur prior to
closing on the merger transaction.
Under this proposal, for an appropriate initial period, the Trustee's
main responsibility would be to pursue the contractual registration rights
process under the TWE partnership agreement, with the goal of obtaining the most
favorable price consistent with concluding the sale of the TWE interest within a
reasonable period. The initial period could be extended if a substantial portion
of the TWE interest has been divested prior to the end of the initial period.
If, prior to the sale through the registration rights process, the grantor of
the trust (AT&T Comcast) proposes an alternative means of divesting the TWE
interest, the trustee would be required to effectuate that alternative
transaction. At the end of an initial period, the trustee would be directed to
dispose of the TWE interest in any manner he or she chooses. The proposal is
subject to FCC review and approval and there can be no assurance as to whether
there will be any trust or as to the terms or provisions thereof.
As previously disclosed, AT&T has submitted a request to Time Warner
Entertainment, pursuant to the Time Warner Entertainment Partnership Agreement,
that Time Warner Entertainment reconstitute itself as a corporation and register
for sale in an initial public offering an amount of partnership interests held
by AT&T Broadband Group determined by an independent investment banking firm so
as to provide sufficient trading liquidity and minimize any initial public
offering discount.
On June 14, 2002, AT&T and AOL Time Warner engaged Banc of America
Securities LLC to perform the appraisals, and make the other determinations
required, under the Time Warner Entertainment Partnership Agreement, and each of
AT&T and AOL Time Warner made presentations to Banc of America Securities with
respect thereto. Bank of America is required to render its determinations within
30 business days of that date. As previously disclosed, the Time Warner
Entertainment Partnership Agreement provides, among other things, that once
these determinations have been made, Time Warner Entertainment may elect to
register for sale in a public offering the amount of AT&T's interest so
determined by Banc of America Securities to be registrable. If they do not so
elect, AT&T has the right to require the partnership to purchase the registrable
amount of securities at the price determined by Banc of America Securities, in
which case, if AT&T exercises that right, the partnership will have the right to
acquire AT&T's remaining interests in the partnership as well.
The determinations to be made by Banc of America Securities will depend
on a variety of factors, including current market conditions and the capital
structure of the partnership. AT&T cannot predict what the result of this
appraisal process will be or what portion, if any, of the partnership interests
will be sold as a result thereof. In addition, there can be no assurance as to
the timing for the delivery by Banc of America of its determinations or the
other matters described above, or as to the ultimate outcome of this process or
any alternative approach that might be discussed by the parties to the
partnership.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: July 3, 2002
AT&T CORP.
By: /s/ Marilyn J. Wasser
-------------------------------------
Name: Marilyn J. Wasser
Title: Vice President - Law and
Secretary