S&P affirms AT&T

Standard & Poor's said it affirmed the ratings on AT&T Inc. and related entities, including the A- long-term and A-2 short-term corporate credit ratings.

The outlook is stable.

This follows news that the company has reached a definitive agreement to acquire wireless carrier T-Mobile USA from Deutsche Telekom in a cash-and-stock transaction currently valued at about $39 billion.

The affirmation reflects a view that AT&T's leverage will increase as a result of the transaction, S&P said, although this should be offset by a somewhat improved business risk profile.

The agency said it estimates that AT&T will have about 130 million subscribers, substantially more than its nearest competitor Verizon Wireless.

Although there are potential integration risks as with any business combination of this magnitude, S&P said it believes the addition of T-Mobile's wireless network infrastructure and spectrum will bolster AT&T's competitive position by improving the quality of its network coverage.

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