AT&T's failure to buy T-Mobile USA could pose risks for bondholders, Fitch Ratings said Thursday.
"Without the benefits of the transaction synergies, AT&T could increase company stock buybacks beyond moderate levels," the credit-rating agency said. "We would also have a negative view of uncertainty regarding AT&T's next move to acquire wireless spectrum and of breakup fees. AT&T's need to enhance its capacity could lead to a rise in capital spending and/or the acquisition of spectrum through other transactions."
Fitch also expressed skepticism that T-Mobile could effectively compete with its bigger rivals and remain "independently viable" if the merger collapses.
AT&T has about a month to decide whether it wants to continue to pursue a $39 billion acquisition that has faced strong opposition from the U.S. Department of Justice and Federal Communications Commission. The company, which was sued by the Justice Department in an antitrust lawsuit that has been put on hold temporarily, must file a report by Jan. 12 and notify U.S. District Judge Ellen Huvelle whether it still wants to buy T-Mobile.
