Fitch rates AT&T notes A

Fitch Ratings said it assigned an A rating to AT&T's proposed $1 billion to $1.5 billion of five-year notes.

The outlook is stable.

Proceeds will be used for general corporate purposes.

The rating incorporates expectations that, on a long-term basis, the company has the financial flexibility to maintain leverage in a range appropriate for its rating category, according to Fitch.

At the end of third quarter, leverage was 1.75x.

AT&T stopped repurchasing common stock and reduced debt by $3.4 billion in the third quarter. Due to the continued stress in the credit and banking markets, the company's plans are to continue to direct free cash flow toward debt reduction during the remainder of 2008, the agency noted.

Ratings also reflect the company's diversified revenue mix, its significant size and economies of scale as well as expectation that it will benefit from continued growth in wireless operating cash flows, the agency said.

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