U.S. telecommunications provider AT&T is acquiring T-Mobile in a $39 billion deal that would create the largest U.S. wireless communications provider. We expect leverage to increase modestly as a result of the transaction. However, if completed, the combination would lead to a somewhat improved business risk profile, in our view. We are affirming our 'A-' long-term and 'A-2' short-term ratings on AT&T. The rating outlook is stable, although a downgrade could occur if the amount of debt that AT&T incurs in the T-Mobile acquisition rises significantly. On March 21, 2011, Standard&Poor's Ratings Services affirmed its ratings on Dallas-based diversified telecommunications provider AT&T Inc. and related entities, including our 'A-' long-term and 'A-2' short-term corporate credit ratings. The rating
