S&P upgrades Vector

S&P said it raised Vector Group Ltd.’s issuer rating to B+ from B and its senior secured note rating to BB from BB- and kept the recovery rating at 1. However, the agency affirmed the B- rating on Vector’s senior unsecured notes but revised the recovery rating to 6, indicating negligible (0%-10%, rounded estimate 0%) recovery in default, from 5.

Vector plans to spinoff its Douglas Elliman residential real estate brokerage business to stockholders, but the agency said it sees continued satisfactory tobacco profitability, with S&P Global Ratings-adjusted leverage sustained below 5x.

However, S&P said it revised the senior unsecured notes recovery rating to reflect the loss of value from the Douglas Elliman spinoff.

The outlook is stable.

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