Fitch Rates AT&T Receivables Funding, LLC

Fitch Ratings assigns the following rating to AT&T Receivables Funding, LLC's December 2014 investment:

--$1,153,047,923.90 December 2014 investment 'Asf'; Outlook Stable.

KEY RATING DRIVERS:

Fitch's rating is based on the underlying receivables pool, available credit enhancement, AT&T's underwriting and servicing capabilities, and the transaction's legal and cash flow structures.

RATING SENSITIVITIES:

Unanticipated increases in the frequency of defaults or chargeoffs on customer accounts could produce loss levels higher than the base case and would likely result in declines of credit enhancement (CE) and remaining loss coverage levels available to the investments. Decreased CE may make certain ratings on the investments susceptible to potential negative rating actions, depending on the extent of the decline in coverage. Hence, Fitch conducts sensitivity analysis by stressing a transaction's initial base case charge-off assumption by 1.5x and 2.5x and examining the rating implications. The 1.5x and 2.5x increase of the base case chargeoffs represents moderate and severe stresses, respectively, and are intended to provide an indication of the rating sensitivity of the notes to unexpected deterioration of a transaction's performance.

During the sensitivity analysis, Fitch examines the magnitude of the multiplier compression by projecting the expected cash flows and loss coverage levels over the life of investments under higher than the initial base case chargeoff assumptions. Fitch models cash flows with the revised chargeoff estimates while holding constant all other modeling assumptions.

Under the 1.5x base case stress scenario, the multiple for the investments compresses from the initial level to 2.75x-2.85x, corresponding to no rating impact. Under the 2.5x base case stress scenario, the multiple for the investments compresses from the initial level to 1.60x-1.70x, corresponding to a two category downgrade.

Fitch also stressed the timing of the account chargeoffs, modeling a front, mid, and back loaded timing of account chargeoffs. The front loaded chargeoff timing curve is the most stressful, and could result in a one category downgrade of the ratings.

For a discussion of the representations, warranties, and enforcement mechanisms available to investors in this transaction, please see the related appendix, 'AT&T Receivables Funding, LLC - Appendix' published Oct. 31, 2014.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Structured Finance Rating Criteria' (Aug. 4, 2014);

--'EMEA Consumer ABS Rating Criteria' (June 24, 2014);

--'Counterparty Criteria for Structured Finance and Covered Bonds' (May 14, 2014);

--'AT&T Receivables Funding, LLC - Appendix' (Oct. 31, 2014);

--'Representations, Warranties, and Enforcement Mechanisms in Global Structured Finance Transactions' (Oct. 31, 2014).

Applicable Criteria and Related Research:

Global Structured Finance Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=754389

EMEA Consumer ABS Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750766

Counterparty Criteria for Structured Finance and Covered Bonds

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

AT&T Receivables Funding, LLC -- Appendix

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=806048

Representations, Warranties and Enforcement Mechanisms in Global Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=799248

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=958895

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Contacts:

Fitch Ratings
Primary Analyst
Melvin Zhou
Director
+1-212-908-0503
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Harry Kohl
Associate Director
+1-212-908-0837
or
Committee Chairperson
Tracy Wan
Senior Director
+1-212-908-9171
or
Media Relations
Sandro Scenga, +1 212-908-0278
New York
sandro.scenga@fitchratings.com

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