S&P revises AT&T outlook to negative

Standard & Poor's said it revised its outlook on Bedminster, N.J.-based AT&T Corp. to negative from stable based on the likely longer-term continuation of highly competitive secular conditions in the long-distance industry and the resulting pressures on AT&T's profitability.

Simultaneously, S&P said it lowered its commercial paper rating on the company to A-3 from A-2. The long-term ratings on the company, including the BBB corporate credit rating, were affirmed.

S&P said the outlook revision reflects AT&T's challenging business risk profile resulting from intensifying industry pricing pressures, wireless substitution, and slow economic recovery. In addition, completion of regional Bell operating company long-distance approvals could result in intensifying pricing pressures. Despite these challenges, the company still has a good market position and has improved its solid capital structure and liquidity, the agency said.

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