Fitch rates AT&T's senior unsecured notes offering 'A'; outlook negative

Reuters

CHICAGO, November 20 (Fitch) Fitch Ratings has assigned an 'A' rating to AT&T

Inc.'s (AT&T) offering of $1.6 billion of 2.375% senior unsecured notes due 2018

and $400 million of floating rate notes due 2018. Proceeds are expected to be

used for general corporate purposes, including the funding of the cash

consideration for a tender offer of certain debt issues. AT&T's Issuer Default

rating (IDR) is 'A', and the Rating Outlook is Negative.

KEY RATING DRIVERS

The 'A' rating assigned to AT&T is supported by its diversified revenue mix, its

significant size and economies of scale as the largest telecommunications

operator in the U.S., strong free cash flows (FCFs), and Fitch's expectation

that AT&T will benefit from continued growth in wireless operating cash flows.

The Negative Outlook reflects Fitch's expectation that AT&T's net leverage is

likely to approximate 1.8x before declining after 2014. This level was

articulated by the company in November 2012 and is temporarily the upper

boundary of its targeted net leverage. The higher level represents a notable

increase from the 1.5x net leverage maintained by the company prior to its

temporary change in policy.Rating Telecom CompaniesAdditional Disclosure

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