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Moody's affirms Reynolds American
Moody's Investors Service said it affirmed Reynolds American Inc.'s Ba2 corporate family and senior secured bonds ratings, B2 senior unsecured bond rating, SGL-3 speculative grade liquidity rating and negative outlook following the company's announcement that it had reached agreement to acquire the Conwood Co. for about $3.5 billion in cash.
The agency said the affirmation reflects the strategic benefits of the transaction and the substantial cushion in Reynolds American's financial profile, which can accommodate the additional $3.2 billion of debt at the current rating level.
The rating outlook remains negative based on ongoing uncertainties associated with the litigation environment the company faces and the very limited scope for any additional incurrence of debt at the current rating level, Moody's said.
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