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