S&P: Altria unaffected

Standard & Poor's said its ratings and outlook on Altria Group, Inc. (BBB+/stable/A-2) are not affected by its decision to spin off its subsidiary Philip Morris International Inc. to the company's shareholders on a one-for-one basis on March 28.

Altria also announced post spinoff share repurchase plans for both entities of $7.5 billion over two years for Altria and $13 billion over two years for Philip Morris and plans to establish dividend payout policies of 75% for Altria and 65% for Philip Morris.

Ratings reflect its leading market position in the mature U.S. market, which will remain its core operations after the spinoff, its modest financial risk profile and substantial free cash flow generation, S&P said.

These strengths are offset somewhat by the company's exposure to U.S. litigation risk, and its participation in the highly competitive and declining U.S. cigarette market, the agency said.

Despite the expected increase in leverage because of the initiatives, adjusted total debt-to-EBITDA ratio is expected to remain between 1 times and 1.5 times, S&P said.

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