Reynolds will continue operating near top of target leverage range

By Devika Patel

Knoxville, Tenn., Oct. 19 – Reynolds American Inc. plans to stay in the higher end of its target total debt to EBITDA range of 1.5x to 2.5x, the company reported on Wednesday.

“RAI ended the quarter with $1.9 billion in cash balances, which takes into account the repayment of the company’s $500 million bond that matured on Aug. 4,” chief financial officer and executive vice president Andrew D. Gilchrist said on the company’s 2016 third-quarter earnings call on Wednesday.

“This reduction in RAI’s total outstanding debt, along with the continued growth in our businesses has now brought the company within the top end of its long-term target leverage range of 1.5x to 2.5x total debt to EBITDA.

“I would note here, that given the relatively low interest rate outlook, along with our improving interest coverage, the company remains comfortable operating at the higher end of this target leverage range,” Gilchrist said.

Reynolds American is a Winston-Salem, N.C.-based manufacturer and seller of cigarettes and other tobacco products.

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