Moody's cuts Avon to Baa3

Moody's Investors Service said it downgraded Avon Products, Inc.'s senior unsecured ratings to Baa3 from Baa2 and its guaranteed subsidiary's commercial paper rating to Prime-3 from Prime-2, concluding the review for downgrade initiated on Nov. 1.

The outlook is stable.

Moody's said the downgrade reflects its view that Avon will continue to face revenue and earnings pressure over the next two years. Moody's believes that the prospect of slower developing market growth, competition, and inflationary cost pressure in selected markets will create operating headwinds.

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