S&P rates Reynolds notes BBB-

Standard & Poor's said it assigned a BBB- senior unsecured debt rating to Reynolds American Inc.'s $2.55 billion senior notes, which include $450 million 1.05% senior notes due 2015, $1.1 billion 3.25% senior notes due 2022 and $1 billion 4.75% senior notes due 2042.

The proceeds will be used for general corporate purposes, including stock repurchases and the repayment of its $625 million 7.25% notes due 2013 and $550 million aggregate principal term loan balance.

All of the existing ratings on Reynolds , including the BBB- corporate credit rating, remain unchanged.

The outlook is stable.

The ratings reflect that the company will maintain a satisfactory business risk profile and an intermediate financial risk profile, S&P said.

The ratings also consider R.J. Reynolds Tobacco Co.'s solid market position in the U.S. tobacco industry as the second-largest cigarette manufacturer, its good profitability and solid, predictable free cash flow generation, the agency said.

It also recognizes the potential for adverse litigation outcomes, the competitive pricing environment, the contracting U.S. cigarette industry and an expectation for further increases in state and federal excise taxes over time, S&P said.

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