S&P; May Cut AT&T;’s Credit, Debt Ratings

NEW YORK — Standard & Poor’s warned Tuesday that it may cut AT&T; Corp.’s gilt-edged credit and debt ratings.

The credit rating agency said its warning “reflects concerns regarding AT&T;’s cable television strategy, long-term prospects for AT&T;’s core long-distance business, a more aggressive wireless expansion plan and the company’s overall strategic direction.”

A downgrade could be in excess of one notch, S&P; said.

The ratings warning comes as Basking Ridge, N.J.-based AT&T; faces rising competitive pressures, costly business expansions and a falling stock price.

AT&T; shares have fallen 47% from their 52-week closing high of $60.44 set March 29. Its shares rose $1.50 on Tuesday to close at $31.75 on the New York Stock Exchange.

S&P; said it may cut AT&T;’s long-term corporate credit and senior unsecured debt ratings from “AA-minus,” its fourth-highest grade, and its short-term corporate credit and debt ratings from “A-1-plus,” its highest rating.

Responding to S&P;’s action, AT&T; said, “There’s no question that the ongoing transformation of AT&T; has produced significant changes that require closer review.”