Moody's gives Ba1 to British American Tobacco hybrid notes

Moody's Investors Service said it assigned a Ba1 long-term rating to the proposed perpetual junior subordinated notes to be issued by British American Tobacco plc.

The outlook is stable.

BAT's Baa2 long-term issuer rating and stable outlook are unaffected by the new rating assigned.

“The Ba1 rating assigned to the hybrid bonds is two notches below BAT’s long-term issuer rating of Baa2, primarily because the bonds are deeply subordinated and ranking senior only to common equity in the company's capital structure,” said Roberto Pozzi, a Moody's senior vice president and lead analyst for BAT, in a news release.

The proceeds will be used for general corporate purposes, including repayment of debt.

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