S&P upgrades Altria

Standard & Poor's said it raised all of the ratings on Altria Group Inc., including the long-term corporate credit and senior unsecured note ratings to A- from BBB+ and short-term commercial-paper rating to A-1 from A-2.

The outlook is stable.

The upgrades reflect Altria's continued industry-leading 50% market share, solid profitability and assumption that the company will continue to successfully manage the litigation and regulatory environments, S&P said.

The upgrades also are based on an expectation that Altria's solid financial performance will continue and a belief that it will maintain its beer-industry investment for at least five years to address potential meaningfully unfavorable litigation outcomes, including potential class action judgments.

The ratings reflect the company's solid positions across the tobacco industry, very high EBITDA margin, retail incentive programs that facilitate favorable product placement on store shelves and a strong management team, the agency said.

Partly offsetting these strengths are the secular decline in U.S. cigarette volumes, evolving federal and local regulatory environments that could lead to further reductions in tobacco use and meaningful litigation risk, S&P said.

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