Correction: Fitch Ratings Changes SBC's Rating Outlook To Negative.

Business Editors

CHICAGO--(BUSINESS WIRE)--July 31, 2002

(this is an amended version of a press release issued earlier today, incorporating a list of SBC-affiliated rated entities)

Fitch Ratings has affirmed the 'AA' long-term and 'F1+' short-term ratings of SBC Communications (SBC). Fitch has also revised the Rating Outlook on SBC to Negative from Stable. The change in Rating Outlook also applies to the existing long-term debt of various issuers also rated 'AA' that no longer issue debt, as SBC has consolidated its financing activities at the SBC Communications level. The issuers are listed below.

The change in the Rating Outlook is reflective of Fitch's concern over the deterioration in SBC's core wireline business. EBITDA in the wireline business has been pressured by the weak demand for telecom services, competitive entry and a difficult regulatory environment. While SBC is mitigating the impact of these forces through cost management activities, pressure on revenue growth and EBITDA is likely to remain in place for the near future. Financial quantitative protection measures are expected to remain relatively stable over the near-term due to forecasted debt reductions, however, the change in outlook reflects the increased business risk posed by the pressures on operating profitability. Should such pressures continue, SBC may be challenged to sustain its credit measures at current levels.

SBC's total switched access lines declined 3.8% in the second quarter of 2002 relative to one year ago and continuing a trend of access line declines that began with the second quarter of 2001. A significant portion of the recent decline in revenue can be attributed to the success its competitors are having in marketing services using SBC's unbundled network element platform (UNE-P). Operating profits are pressured owing to the low prices SBC receives on UNE-P in certain states. Also indicative of the weak demand for services and competitive effects was the 6.6% decline in business lines in the quarter, as well as the reduction in data revenue growth rates.

SBC's external financing needs in 2002 consist primarily of the refinancing of maturing long-term and short-term debt. During the course of the year, SBC is expected to produce approximately $3 billion in net free cash flow. Debt levels are expected to decline by yearend 2002, producing stable credit protection measures. Potential improvements in credit protection measures that could be generated from free cash flows will be restrained by SBC's 100 million share buyback program.

In 2002, SBC's overall liquidity is expected to benefit from a material reduction in the capital spending program. Capital spending is expected to decline to less than $8 billion in 2002 from $11.2 billion in 2001.

In 2002, SBC's debt leverage is expected to approximate 1.2-1.3 times (x), including EBITDA from the proportionate results of Cingular. Including Cingular's proportionate results, EBITDA-to-interest is expected to be in the 12.5x-13.5x range.

The Rating Outlook is changed to Negative from Stable on the following issuers:

    SBC Communications Corp.;
    Ameritech Capital Funding;
    Illinois Bell Telephone Company
    --Rating Outlook Negative also applies to 'AA+'-rated senior
      secured debt;
    Indiana Bell Telephone Company;
    Michigan Bell Telephone Company;
    Ohio Bell Telephone Company;
    Pacific Bell Telephone Company;
    Wisconsin Bell Telephone Company;
    Southern New England Telecom Corp.;
    Southern New England Telephone;
    Southwestern Bell Telephone;
    Southwestern Bell Capital Corp..