TEXT - S&P rates AT&T proposed notes 'A-'

Fri Nov 16, 2012 2:37pm EST

Nov 16 - Standard & Poor's Ratings Services today assigned Dallas-based
telecom company AT&T Inc.'s proposed senior notes (undetermined amount)
due 2042 and 2045 its 'A-' issue-level rating. We expect the company to exchange
these notes for existing debt, and we do not expect this transaction to
materially affect key credit measures.

The 'A-' long-term corporate credit rating on AT&T remains unchanged, as do 
the 'A-2' short-term rating and the stable rating outlook. The ratings on AT&T 
continue to reflect an overall "strong" business risk profile, bolstered by 
its wireless business, and a financial risk profile which Standard & Poor's 
considers "intermediate".  Our financial risk assessment is based on the 
company's substantial free operating cash flow generation and leverage in the 
mid-2x area, including our adjustments for operating leases and postretirement 
liabilities. Still, our rating incorporates the expectation that leverage 
could rise to the high-2x area over the next few years because of the 
company's planned $14 billion of network investments to support growth 
initiatives in the wireless and wireline segments.  We consider the leverage 
increase to still be supportive of the ratings and the 'intermediate' 
financial risk profile, albeit at the higher end of our maximum leverage 
parameter. 

For the corporate credit rating rationale, please see the summary analysis on 
AT&T published on July 2, 2012, on RatingsDirect.

RELATED CRITERIA AND RESEARCH
     -- Business Risk/Financial Risk Matrix Expanded, Sept. 18, 2012
     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
     -- Use Of CreditWatch And Outlooks, Sept. 14, 2009
     -- Criteria Guidelines For Recovery Ratings, Aug. 10, 2009
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
     -- 2008 Corporate Criteria: Rating Each Issue, April 15, 2008
     -- 2008 Corporate Criteria: Ratios And Adjustments, April 15, 2008


RATINGS LIST

AT&T Inc.
 Corporate Credit Rating                A-/Stable/A-2

New Rating

AT&T Inc.
 Senior Unsecured Notes Due 2042        A-
 Senior Unsecured Notes Due 2045        A-
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