Fitch affirms Diageo

Fitch Ratings said it affirmed Diageo plc's long-term issuer default rating and senior unsecured ratings at A- and short-term issuer default rating at F2.

The outlook is stable.

The agency also said it affirmed the senior unsecured ratings of the debt issued by Diageo's subsidiaries, Diageo Finance BV, Diageo Capital plc and Diageo Investment Corp. at A- and F2.

The affirmation reflects an opinion that Diageo's prospective acquisition of Turkish company Mey Icki for £1.3 billion should not affect the improved credit metrics it achieved in 2010, Fitch said.

Over a difficult 2009 and 2010, Diageo refrained from share buyback and mergers and acquisitions activity, regaining a comfortable degree of headroom within its issuer default rating, said Giulio Lombardi, a Fitch analyst.

The ratings also consider its global leadership position, underpinned by its strong and well-recognized brands in the lucrative international premium spirits sector, as well as its successful track record of category extensions and new product launches, the agency said.

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