Fitch boosts British American Tobacco

Fitch Ratings said it upgraded British American Tobacco plc's long-term issuer default and senior unsecured ratings to BBB+ from BBB and perpetual subordinated notes rating to BBB- from BB+.

“The upgrades reflect BAT's improved leverage metrics, and our expectation of further deleveraging supported by the recent tightening of BAT's leverage target corridor, as well as improved profitability and strong free cash flow (FCF) generation,” Fitch said in a press release.

The agency said it forecasts BAT’s net EBITDA leverage at 2.8x, assuming 50% of hybrid instruments in debt, in 2023 to fall to or below 2.5x from 2025.

The outlook is stable.

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