Credit FAQ: A Closer Look At AT&T's $39B Deal To Acquire T-Mobile USA Apr 11
Standard & Poors, April 2011
Abstract
On March 20, 2011, U.S. diversified telecommunications provider AT&T Inc. (A-/Stable/A-2) announced it had reached a definitive agreement to acquire wireless carrier T-Mobile USA from Deutsche Telekom AG (DT; BBB+/Positive/A-2) in a cash and stock transaction valued at $39 billion. Standard & Poor's Ratings Services has received various investor inquiries about the transaction and its effect on the credit profiles of both AT&T and DT. Standard & Poor's affirmed its 'A-' long-term and 'A-2' short-term corporate credit ratings on AT&T on March 21, 2011. Although we expect the financial risk profile to weaken modestly, including adjusted leverage increasing to about 2.9x from 2.5x, because of the transaction, we view the business risk profile more favorably given the potential benefits of...
Companies mentioned in this report are:
- AT&T Inc.
- Deutsche Telekom AG
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
- AT&T Inc.
- Deutsche Telekom AG
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