S&P rates Reynolds American loan BBB-

Standard & Poor's said it assigned its BBB- senior unsecured debt rating to Reynolds American Inc.'s $1.35 billion revolving credit facility maturing Oct. 8, 2017.

The agency withdrew its BBB- rating on Reynolds American's $750 million revolving credit facility due 2015, which was terminated. It estimates total debt outstanding is about $5.3 billion.

All existing ratings on Reynolds American, including the BBB- corporate credit rating, remain unchanged, and the outlook is stable.

S&P said the ratings on Reynolds American reflect its view that the company will maintain a "satisfactory" business risk profile and an "intermediate" financial risk profile. The business risk assessment incorporates Reynolds American subsidiary R.J. Reynolds Tobacco Co.'s solid market position as the second-largest cigarette manufacturer in the U.S., its good profitability and predictable free cash flow generation.

It also recognizes the potential for adverse litigation outcomes and evolving regulatory environment, the competitive pricing environment, the contracting U.S. cigarette industry and S&P's expectation for further increases in state and federal excise taxes over time, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.