Fitch puts Avon on watch

Fitch Ratings said it placed the ratings of Avon Products, Inc. and Avon Capital Corp. on Rating Watch negative.

The negative watch follows Coty, Inc.'s preliminary, non-binding offer to acquire Avon's outstanding shares, Fitch said.

If the offer is accepted and is financed with significant amounts of debt, the combined entity's credit protection measures would not be in the current rating category, the agency said.

The watch will be resolved based on the outcome of the discussions between the two entities, Fitch said.

Avon, with $11 billion in revenues, is far larger than Coty, the agency said. Avon has a senior unsecured debt rating of BBB- with a stable outlook.

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