Moody's rates R.J. Reynolds notes Ba2

Moody's Investors Service said it assigned a Ba2 rating to the new senior secured notes maturing in 2010 and 2015 issued by R.J. Reynolds Tobacco Holdings, Inc. and affirmed all the existing ratings.

The outlook remains negative.

The action reflects an unchanged capital structure and level of total indebtedness and maintenance of the company's liquidity strength, the agency said.

Moody's said the ratings reflect the strength of several of the company brands, expected cost reduction benefits from the recent merger between R.J. Reynolds and Brown and Williamson and increased pricing flexibility in the industry.

They also reflect declining consumption volumes, the strength of the company's main competitor, Philip Morris USA, and significant litigation against the company's main operating subsidiary, R.J. Reynolds Tobacco Co., Moody's added.

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