November 28, 2012 / 8:06 PM / in 5 years

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

Nov 28 - Standard & Poor’s Ratings Services today assigned Dallas-based diversified telecom provider AT&T Inc.’s proposed EUR1 billion senior notes due 2020 its ‘A-’ issue-level rating. 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 since we do not expect the transaction to materially affect key credit measures. 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 of about 2.5x as of Sept. 30, 2012, 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

-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008 Temporary contact number: Allyn Arden (917-882-2541) RATINGS LIST AT&T Inc. Corporate Credit Rating A-/Stable/A-2 New Rating EUR1 Bil. Senior Notes Due 2020 A-

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