Fitch rates AT&T euro notes A

Fitch Ratings said it assigned an A rating to AT&T Inc.’s proposed euro note offering of senior unsecured debt, consisting of floating-rate notes due 2019, notes due 2022 and notes due 2029.

The company’s issuer default rating and debt securities remain on Rating Watch negative, where they were placed in May after news of the acquisition of DirecTV.

DirecTV’s wholly-owned indirect subsidiary, DirecTV Holdings LLC, has an issuer default rating of BBB-.

The proceeds will be used for general corporate purposes.

Fitch said it believes AT&T’s acquisition of DirecTV will improve its financial flexibility owing to DirecTV’s strong free cash flows and the significant equity component in the transaction financing.

The acquisition also will strengthen AT&T’s position in the evolving video landscape, offering the potential to capitalize on trends for mobile video and over-the-top video delivery, the agency said.

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