NEW YORK (AP) — Moody's Investors Service said Monday it has changed its outlook for the debt ratings of AT&T to negative from stable after the company said it is buying former Alltel assets from Verizon Wireless.
AT&T said Friday it will buy the assets of Verizon Wireless in 79 mainly rural areas for $2.35 billion. Verizon Wireless was forced to sell the service areas, which are spread over 18 states, to satisfy regulatory conditions of its purchase of Alltel.
Moody's said the outlook change reflects its "concern that given the increase in debt over the last two years (including debt likely to be incurred for pending acquisitions), weak economic conditions and the likelihood of slower growth and increased competition in the wireless business."
At the same time, Moody's also affirmed AT&T's "A2" senior unsecured and Prime 1 short-term ratings.
Verizon Wireless is a joint venture of Verizon Communications and Britain's Vodafone Group PLC.