Standard & Poor’s Cuts AT&T;’s Debt Ratings

AT&T; Corp.’s debt ratings were cut by Standard & Poor’s and they may be lowered further as the New York-based company carries out its plan to split into three businesses by 2002. S&P; initially put AT&T;’s ratings under review for a downgrade on Aug. 29, citing concerns that the company was expanding its wireless and cable-television operations too quickly. On Sept. 30, AT&T; had $61.8 billion in total debt, $26 billion of which comes due within a year. AT&T;’s corporate credit rating was cut one notch to “A” from “AA-” by Standard & Poor’s, while its commercial paper rating went to “A1” from “A1+.” With its ratings still under review, AT&T; also would have limited access to the commercial paper market. AT&T; is asking banks to provide a new $25-billion credit line to help repay short-term debt and act as back-up in case it can’t access its $20-billion commercial paper program.

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