Moody's could confirm, lower Allied Domecq

Moody's Investors Service said in its review of Allied Domecq that the company's Baa3 senior unsecured ratings should be confirmed if Pernod Ricard SA decides to issue an unconditional guarantee in favor of Allied Domecq bonds.

The agency added the senior unsecured ratings of Allied Domecq Limited and guaranteed subsidiaries should be downgraded by 1 notch if Pernod Ricard does not issue such a guarantee.

At the same time, Moody's indicated that the senior unsecured rating of Pernod Ricard is Baa3 both on a guaranteed and unguaranteed basis.

The agency added that if Pernod Ricard's rating was to be downgraded in the future, Moody's would probably assign a corporate family rating at Ba1 and the senior unsecured rating of Pernod Ricard and of Allied Domecq would expectedly be downgraded by two notches to Ba2, reflecting structural subordination and the lower probability of a removal of upstream guarantees.

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