AT&T Inc. was once the poster child for firms willing to sacrifice their credit ratings for the sake of debt-fueled acquisitions. Now, the company is making its biggest push yet to cut debt and ditch its long-held status as the world's largest borrower.

The telecom giant will reduce net debt by US$43 billion as a part of a plan to spin off its media operations in a deal with Discovery Inc., according to an investor presentation accompanying the announcement. If its gross debt of $190 billion declines by roughly the same amount, AT&T would drop behind Verizon Communications Inc. in the rankings of the most indebted non-financial companies globally, according to data compiled by Bloomberg.

AT&T has been on a years-long effort to tame a debt load that once swelled to about $200 billion, largely accumulated via its 2018 acquisition of Time Warner Inc. With the Discovery transaction, AT&T will reach its goal of reducing leverage to 2.5 times. It will do so a year ahead of schedule and will possibly spare bondholders from any potential ratings action that would push it closer to speculative grade.