AT&T INC. (AT) Files An 8-K Entry into a Material Definitive Agreement

ITEM1.01 Entry into a Material Definitive Agreement.

On November 15, 2016, ATT Inc. (the Company) entered into a $10
billion Term Loan Credit Agreement (the Term Loan) with JPMorgan
Chase Bank, N.A., as agent, and a syndicate of 20 lenders. In
connection with the entry into the Term Loan, the Tranche 2
Commitments in the aggregate amount of $10 billion under the $40
billion Term Loan Credit Agreement (the Bridge Loan), dated as of
October 22, 2016 and amended and restated on November 15, 2016,
among the Company, the lenders named therein and JPMorgan Chase
Bank, N.A., as agent, have been reduced to zero. The Tranche 1
Commitments under the Bridge Loan in the aggregate amount of $30
billion remain in effect.

In the event advances are made under the Term Loan, those
advances would be used solely to finance a portion of the cash
consideration to be paid in the merger (the Merger) of West
Merger Sub, Inc., a Delaware corporation and a wholly owned
subsidiary of the Company (Merger Sub), with and into Time Warner
Inc., a Delaware corporation (Time Warner), the refinancing of
debt of Time Warner and its subsidiaries and the payment of
related fees and expenses.

Under the Term Loan, there are two tranches (Tranche A and
Tranche B) of commitments, each in an aggregate amount of $5
billion.

The obligations of the lenders under the Term Loan to provide
advances will terminate on the earliest of (i) October 23, 2017,
subject to extension in certain cases to a date not beyond April
23, 2018, (ii) the consummation of the transactions contemplated
by the Agreement and Plan of Merger, dated as of October 22,
2016, among Time Warner, the Company and Merger Sub (the Merger
Agreement) without the borrowing of advances under the Term Loan
and (iii) the termination of the Merger Agreement.

Advances would bear interest, at the Companys option, either:

The Applicable Margin for Eurodollar Rate Advances under the
Tranche A Facility will be equal to 1.000%, 1.125% or 1.250% per
annum depending on the Companys unsecured long-term debt ratings.
The Applicable Margin for Eurodollar Rate Advances under the
Tranche B Facility will be equal to 1.125%, 1.250% or 1.375% per
annum depending on the Companys unsecured long-term debt ratings.
The Applicable Margin for Base Advances will be equal to the
greater of (x) 0.00% and (y) the relevant Applicable Margin for
Eurodollar Rate Advances minus 1.00% per annum, depending on the
Companys unsecured long-term debt ratings.

The Company will also pay a commitment fee (Commitment Fee) of
0.090%, 0.50% or 0.125% of the commitment amount per annum,
depending on the Companys unsecured long-term debt ratings.

As of the date of this filing, the Companys unsecured long-term
debt is rated BBB by SP, Baa1 by Moodys and A- by Fitch, and,
accordingly, the Applicable Margin for Eurodollar Rate Advances
at this time is 1.000% and 1.125%, respectively, for the Tranche
A Facility and Tranche B Facility. SP, Moodys and Fitch may
change their ratings at any time, and the Company disclaims any
obligation to provide notice of any changes to these ratings.

In the event that the Companys unsecured long-term debt ratings
are split by SP, Moodys and Fitch, then the Applicable Margin for
Eurodollar Rate Advances, the Applicable Margin for Base Advances
and the Commitment Fee, as the case may be, will be determined by
the highest of the three ratings, except that in the event the
lowest of such ratings is more than one level below the highest
of such ratings, then the Applicable Margin for Eurodollar Rate
Advances, the Applicable Margin for Base Advances and the
Commitment Fee, as the case may be, will be determined based on
the level that is one level above the lowest of such ratings.

Advances under the Term Loan are conditioned on the following:

Repayment of all advances with respect to the Tranche A Facility
must be made no later than two years and six months after the
date on which such advances are made. Amounts borrowed under the
Tranche B Facility will be subject to amortization commencing two
years and nine months after the date on which such advances are
made, with 25 percent of the aggregate principal amount thereof
being payable prior to the date that is four years and six months
after the date on which such advances are made, and all remaining
principal amount due and payable on the date that is four years
and six months after the date on which such advances are made.

The Term Loan contains certain representations and warranties and
covenants, including a limitations on liens covenant and,
beginning in the first full fiscal quarter ending after the
closing date, a net debt-to-EBITDA financial ratio covenant that
the Company will maintain, as of the last day of each fiscal
quarter, a ratio of not more than 3.5 to 1 of:

(A) all items that would be treated under accounting principles
generally accepted in the United States (GAAP) as specified in
the Term Loan as indebtedness on the Companys consolidated
balance sheet minus the amount by which the sum of (i) 50% of
unrestricted cash and cash equivalents held by the Company and
its subsidiaries in the United States (it being understood and
agreed that the proceeds of any Permanent Financing (as defined
in the Term Loan) held or placed into escrow shall be deemed to
be unrestricted), and funds available on demand by the Company
and its subsidiaries in the United States (including but not
limited to time deposits), and (ii) 65% of unrestricted cash and
cash equivalents held by the Company and its subsidiaries outside
of the United States, exceeds $2 billion in the aggregate (or the
avoidance of doubt, any cash and cash equivalents held by the
Company and its subsidiaries outside of the United States shall
not be considered restricted solely as a result of the
repatriation of such cash and cash equivalents being subject to
any legal limitation or otherwise resulting in adverse tax
consequences to the Company), to

(B) the net income of the Company and its consolidated
subsidiaries, determined on a consolidated basis for the four
quarters then ended in accordance with GAAP, adjusted to exclude
the effects of (a) gains or losses from discontinued operations,
(b) any extraordinary or other non-recurring non-cash gains or
losses (including non-cash restructuring charges), (c) accounting
changes including any changes to Accounting Standards
Codification 715 (or any subsequently adopted standards relating
to pension and postretirement benefits) adopted by the Financial
Accounting Standards Board after the date of the Term Loan, (d)
interest expense, (e) income tax expense or benefit,
(f)depreciation, amortization and other non-cash charges
(including actuarial gains or losses from pension and
postretirement plans), (g) interest income, (h) equity income and
losses and (i) other non-operating income or expense.In the event
the Company makes a Material Acquisition or a Material
Disposition (each as defined in the Term Loan) during the
relevant four quarter period, pro forma effect will be given to
such material acquisition or material disposition, as if such
material acquisition or material disposition occurred on the
first day of such period.

Events of default under the Term Loan, which, if occurring after
the advances are made, would result in the acceleration of or
permit the lenders to accelerate, as applicable, required payment
and which would increase the Applicable Margin for Eurodollar
Rate Advances and the Applicable Margin for Base Advances by
2.00% per annum, whether automatically or upon the request of the
requisite lenders, as applicable, include the following:

Prior to the closing date, only a payment or bankruptcy event of
default would permit the lenders to terminate their commitments
under the Term Loan.

The description of the Term Loan contained in this Item 1.01 does
not purport to be complete and is qualified in its entirety by
reference to the Term Loan, which is attached hereto as Exhibit
10.1 and is incorporated herein by reference.

ITEM2.03 Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of a
Registrant

The disclosure under Item 1.01 is incorporated by reference into
this Item 2.03.

ITEM9.01 Financial Statements and Exhibits.

(d) Exhibits

About AT&T INC. (AT)