Moody's upgrades British American Tobacco to A3

Moody's Investors Service said it upgraded to A3 from Baa1 the long-term issuer rating of British American Tobacco plc and the senior ratings of its guaranteed subsidiaries. The Prime-2 short-term rating was affirmed, and the outlook is stable.

"Our upgrade of BAT's rating to A3 reflects the group's continued record of solid results and the expectation that it will maintain stable credit metrics as well as increase its profitability," Paolo Leschiutta, a Moody's vice president and senior credit officer, said in an agency news release.

The agency said British American Tobacco's ratings are supported by a combination of a strong business profile and credit metrics that compensate for the group's aggressive returns to shareholders, increasing regulatory pressure and what Moody's perceives to be a degree of litigation risk.

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