Moody's affirms Avon; outlook up to stable

Moody's Investors Service said it affirmed Avon Products, Inc.'s A2 long-term rating and Avon Capital Corp.'s Prime-1 short-term ratings while revising the outlook to stable from negative for both issuers.

According to the agency, the affirmation of Avon's A2 ratings with a stable outlook reflects:

• The resiliency of the company's operating performance in the past six months which includes strong organic growth and improving profitability;

• Improving key credit metrics including retained cash flow to net debt of over 35% and interest coverage of nearly 7.0 times; and

• Its expectation that the company's financial policies regarding liquidity management and share repurchases will remain conservative.

"Avon has performed very well relative to its consumer products peer group and remains one of the best geographically positioned companies to benefit from emerging market growth over the next several years," said Moody's vice president and senior credit officer, Janice Hofferber.

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