Moody's: AT&T outlook stable

Moody's Investors Service said it changed the outlook on AT&T Inc. to stable from negative and assigned an A2 rating to AT&T's new $8 billion credit facility and affirmed its A2 senior long-term and Prime-1 short-term ratings.

The revision is based on the company's recently improved operating performance, its efforts over the past two years to reduce its financial leverage and expectation that management will adhere to its stated credit metric targets, according to the agency.

Moody's said it expects the company's adjusted debt-to-EBITDA leverage to fall to below 2.0 times at year-end 2010 from 2.2 times in 2008.

AT&T's A2 senior unsecured rating reflects the company's position as the largest telecommunications company in the United States and its strong and well-diversified cash flow, the agency said.

The company's rating is also supported by its dominant position in nearly all of the key segments in which it operates, the agency added.

The rating reflects the potential for negative forces to pressure AT&T's fundamental operating profile, persistently weak macroeconomic conditions and maturation of the wireless industry in the United States, the agency noted.

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