Moody's affirms UST

Moody's Investors Service said it affirmed the Prime-2 short-term and A3 senior unsecured ratings of UST, Inc. following the company's announcement that it plans to increase its share buyback program by $300 million in the fourth quarter, bringing its repurchases this year to $600 million.

The outlook is stable.

UST's financial profile will remain consistent with its A3 rating including debt-to-EBITDA ratio of 1.3 times and free cash flow to debt ratios of 16%.

"While UST's incremental shares repurchases represent a more aggressive posture toward financial policy, Moody's recognizes the still strong financial profile and stable operating cash flow of the company," Moody's vice president Janice Hofferber said in a written statement.

The A3 rating reflect the company's powerful brands and market share in smokeless tobacco, its profitability and stable cash flow, conservative financial policies and credit metrics, Moody's said.

The ratings are constrained by the company's relatively small size, its reliance on the U.S. market and the potential for negative sales and earnings impact, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.