Moody’s rates AT&T notes Baa1

Moody's Investors Service said it assigned a Baa1 rating to AT&T Inc.'s new debt offering of C$600 million notes due 2024 and C$750 million notes due 2047.

Proceeds will be used for general corporate purposes.

In connection with Moody's ongoing review of AT&T, the new Baa1 rating will also be on review for downgrade.

In October 2016, the agency placed the company’s ratings on review for downgrade following the company's announcement of its intention to purchase Time Warner Inc. for $85.5 billion. The review will focus on AT&T's pro forma capital structure and its willingness and ability to reduce leverage back toward 3 times (Moody's adjusted), AT&T's current limit for its Baa1 rating.

Moody’s said the Baa1 senior unsecured rating reflects its scale and its well diversified operating cash flows. The rating is also supported by AT&T's dominant position as the No. 1 or No. 2 operator in nearly all of the key segments in which it competes. Yet, growth has been dampened in recent years due to maturing markets, the disruptive effect of evolving technology and increasing competition, the agency explained.

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