S&P: U.S. tobacco unaffected

Standard & Poor's said its ratings and outlook on U.S.-based cigarette and tobacco companies currently are not affected by the Aug. 1 announcement that the U.S. Senate Health, Education, Labor and Pensions Committee approved granting the Food and Drug Administration broad powers to regulate the U.S. tobacco industry.

The companies covered are Altria Group Inc. (BBB+/positive/A-2), parent of Philip Morris USA; Reynolds American Inc. (BB+/positive/-), parent of RJ Reynolds Tobacco Co; Loews Corp. (A/stable/-), parent of Lorillard Tobacco; and UST Inc. (A/Stable/A-1).

The proposed bill still requires a vote by the full senate, which will not occur until after at least Sept. 3, the agency said.

Also, committees in both houses of Congress approved increases to the federal excise taxes on tobacco. S&P said it believes there will be a compromise between the two different bills later this year and that any increase will not take effect until 2008, at the earliest.

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