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

Wed Nov 20, 2013 4:50pm EST

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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