Moody's upgrades AT&T notes, rates new notes A2

Moody's Investors Service said it assigned an A2 rating to AT&T Inc.'s new €1.25 billion senior unsecured notes due 2015.

The agency also upgraded the senior unsecured ratings of AT&T Mobility LLC and New Cingular Wireless Services, Inc. to A2 from A3, which brings the ratings to the same level as the senior unsecured rating of AT&T.

The outlook was changed to stable from positive.

The agency said the upgrade reflects AT&T Mobility's improved operating performance over the past two years, as demonstrated by the 14.5% year-over-year growth in service revenue in 2007, the 450 basis point increase in the EBITDA margin since 2006, the reduction in churn and increase in market share.

AT&T Mobility's rating is tempered by the potential of escalating price-based competition among the major carriers and the continuing network upgrades and spectrum expenditures necessary to provide the high level of service that customers demand, Moody's added.

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