AT&T recently initiated a relatively small preferred share class. The AT&T rationale was "AT&T intends to use the net proceeds of the Offering for general corporate purposes."
Why did they do this if things were going as planned and why not common shares or debt? The reason is that they lack the necessary cash flow to meet the orders from Elliot to reduce debt and buy back shares.
Typically companies with solid credit ratings don't issue preferred stocks since the dividend payments are not tax-deductible. They issue preferred shares because they've already loaded their balance sheet with a large amount of debt and risk a downgrade if more is issued.
I know this is not directly related to the general theme of this site but it is part of the whole mosaic of where AT&T is now due to miscalculation and bad decisions.
The next time you see John Stevens in the hallway (before he retires when Randall does) ask him if this preferred offering would have occurred if the terrible debt-laden acquisitions by Randall and John had not transpired. And then ask him why he would say something so very stupid like "we are always looking for ways to offer small investors new ways to invest in AT&T". And then finally ask him where was he when the financials for those acquisitions were worked on.