Moody’s downgraded AT&T;’s debt and preferred.

But the telecommunications giant said the downgrading by Moody’s Investors Services wasn’t likely to affect its borrowing costs significantly. Moody’s said it lowered its credit ratings a notch on $7.1 billion in American Telegraph & Telephone debt and $900 million in preferred stock because “weak market conditions and intense competition” will restrict AT&T;’s ability to increase earnings in the intermediate term. AT&T;’s senior debt and preferred stock was lowered to A-1 from AA-3.