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Filed Pursuant to Rule 424 (b) (3)
Registration No. 33-49589
Pricing Supplement No. 5 Dated: August 15, 1994
(To Prospectus dated June 23, 1993 and Prospectus Supplement dated October 8,
1993)
AT&T Corp.
Medium-Term Notes, Series A
Due More than Nine Months From Date of Issue
Fixed Rate Note
Principal Amount: $25,000,000
Agent: Morgan Stanley & Co. Incorporated
acting as Principal
Original Issue Date: September 6, 1994
Maturity Date: September 6, 2009
Issue Price: The agent has purchased the notes
as principal at 100% of the
principal amount for resale to
investors at varying prices
determined by the agent.
Specified Currency: U.S. Dollars
Note Form: Book-Entry
Interest Rate: From September 6, 1994 through
September 5, 1996 7.500%,
From September 6, 1996 through
September 5, 1997 7.600%,
From September 6, 1997 through
September 5, 1998 7.700%,
From September 6, 1998 through
September 5, 1999 7.800%,
From September 6, 1999 through
September 5, 2000 8.000%,
From September 6, 2000 through
September 5, 2001 8.250%.
From September 6, 2001 through
September 5, 2002 8.500%.
From September 6, 2002 through
September 5, 2003 8.750%.
From September 6, 2003 through
September 5, 2004 9.000%.
From September 6, 2004 through
September 5, 2005 9.750%.
From September 6, 2005 through
September 5, 2006 10.500%.
From September 6, 2006 through
September 5, 2007 11.000%.
From September 6, 2007 through
September 5, 2008 12.000%.
From September 6, 2008 through
September 5, 2009 13.000%.
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Interest Payment Dates: Semi-Annually, on each September 6
and March 6, commencing on March 6,
1995. If the Interest Payment Date
is not a New York Banking Day,
interest will be paid on the next
New York Banking Day.
Accrual of Interest: Interest accrues up to, but not
including, the next relevant
Interest Payment Date from, and
including, the next preceding
Interest Payment Date to which
interest has been paid (or from and
including the Original Issue Date
if no interest has been paid on the
Notes) unless the Notes (or any
portion thereof) have been called
for redemption as provided for
below.
Calculation Dates: N/A
Calculation Agent: N/A
Redemption:
The Notes may be redeemed in whole or in part prior to maturity at the option
of the Company.
Optional Redemption Dates: On each Interest Payment Date,
commencing on September 6, 1996.
Optional Redemption Price: 100% of principal amount.
Annual Redemption Price Reduction: N/A
Repayment:
The Notes cannot be repaid prior to maturity at the option of the holder.
Renewal:
The Notes cannot be renewed by the holder.
Extension:
The Notes cannot be extended prior to maturity.
Dual Currency Notes:
The Company can not make payments in an optional currency.
Original Issue Discount
This Note is not a Discount Note or an Original Issue Discount Note.
Plan of Distribution
See Issue Price above.
Taxation
The following discussion of the United States federal income tax
consequences of the ownership of the Notes supplements, and to the extent
inconsistent with replaces, the discussion under the caption "Taxation" in
the Prospectus Supplement dated October 8, 1993. Terms not defined herein
have the same meanings as in the Prospectus Supplement.
This discussion is based on regulations concerning the treatment of
debt instruments issued with original issue discount (the "OID Regulations")
and related provisions of the Code. The OID Regulations are effective for
Notes issued on or after April 4, 1994.
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The Notes provide for interest payable semiannually at a fixed rate
that increases annually, commencing on September 6, 1996, and they are
callable at the option of the Company on any interest payment date,
commencing on September 6, 1996, at 100% of their principal amount plus
accrued and unpaid interest. Under the OID Regulations, as under the
Proposed OID Regulations, the issuer of a debt instrument who has a call
option will be presumed to exercise that call option if the yield of the debt
instrument, assuming the call option is exercised, is lower than it would be
if the call option were not exercised. If the call option is presumed to be
exercised but the debt instrument in fact remains outstanding after the call
date, the OID Regulations treat the debt instrument as if it had in fact been
called and a new debt instrument were issued on such date for an amount equal
to its adjusted issue price on that date. This redemption and reissuance are
solely for purposes of the OID Regulations. Because the interest rate on the
Notes increases each year, commencing on September 6, 1996, and because the
Company has the right to call the Notes at 100% of their principal amount
plus accrued and unpaid interest on each interest payment date, commencing on
September 6, 1996, the Company intends to take the position that the call
options exercisable on each interest payment date on which the interest rate
on the Notes is increased will be presumed to be exercised and a new
instrument issued on each such call date. If the Company does not exercise a
call option which is presumed to be exercised, the Notes will be treated as
redeemed and reissued at 100% of their principal amount. As a result, the
Notes will not bear original issue discount and stated interest on the Notes
will be taxable to a United States Holder as ordinary income at the time that
it is received or accrued, depending on the United States Holder's method of
accounting.
While the OID Regulations have amended many provisions of the Proposed
OID Regulations, such amendments are not relevant to the Notes.
