S&P: Reynolds American unchanged

Standard & Poor's said its ratings and outlooks on Reynolds American Inc. (BB+/negative), as well as its wholly owned subsidiary RJ Reynolds Tobacco Holdings Inc. (RJR, BB+/negative), would not be affected by the announcement that its board of directors approved a two-for-one split of the company's common stock and a 20% increase in its quarterly cash dividend.

The agency said that the increased dividend brings the company closer to its stated payout policy of 75% of net income.

While S&P said it views these actions as somewhat aggressive, they are mitigated by the company's strong operating cash flow, estimated at $1.6 billion per year and significant cash balance, $1.75 billion at March 31.

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