Moody’s stabilizes Philip Morris view

Moody’s Investors Service said it revised its outlook for Philip Morris International Inc. to stable from ratings under review and confirmed the A2 ratings on the company and its senior unsecured debt.

The rating action follows PMI's affiliate Philip Morris Holland Holdings BV (PMHH) reporting it received acceptances for its offer to acquire Swedish Match AB representing 82.59% of that company's shares, and confirmation that PMHH's offer became unconditional. PMI plans to consolidate Swedish Match upon settlement of the shares and its objective remains to delist Swedish Match’s shares after reaching ownership of more than 90%.

“Moody's calculates that pro forma for the debt funding the Swedish Match acquisition PMI's 2022 Moody's-adjusted gross leverage, measured as adjusted debt to EBITDA, will increase to 3x, from 2.2x for PMI stand-alone currently. The rating agency's base case is that profit growth will enable the company to deleverage to around 2.5x by the end of 2024, while maintaining excellent liquidity,” the agency said in a press release.

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