New York, May 19, 2014 -- Moody's Investors Service ("Moody's") has placed the ratings for AT&T Inc. ("AT&T" or the "company"), including its A3 senior unsecured rating on review for downgrade following AT&T's announcement that it has entered into a definitive agreement to purchase DIRECTV (DTV) for $95 per share comprised of $28.50 per share in cash and $66.50 per share in AT&T stock. The purchase price implies a total equity value of $48.5 billion and a total transaction value of $67.1 billion. Moody's review will assess AT&T's ability to integrate DTV's operations while continuing to invest in its core wireline and wireless operations and restore its credit metrics. In particular, Moody's review will focus on AT&T's free cash flow profile and its future tax obligation and capital spending outlook. Given AT&T's weak pre-deal free cash flow profile, its minimal leverage cushion within the A3 rating and its history of debt-financed share repurchase, Moody's believes that there is a strong likelihood that AT&T is unable to hold its A3 rating following the acquisition of DTV. AT&T's Prime-2 commercial paper rating is unchanged.

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