Fitch Affirms Altria IDR at 'BBB+', Kraft at 'A-' Following Intent to Spin-off Kraft.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed Altria Group, Inc. and its consolidated subsidiaries, as indicated below. The Outlooks are Stable. Approximately $19.6 billion of debt at Sept. 30, 2006 is affected by the rating actions. Altria Group, Inc. (Altria) --Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) affirmed at 'BBB+'; --Senior unsecured debt affirmed at 'BBB+'; --Credit facility affirmed at 'BBB+'; --Commercial paper affirmed at 'F2'. Kraft Foods Inc. (Kraft) --Issuer Default Rating (IDR) affirmed at 'A-'; --Senior unsecured debt affirmed at 'A-'; --Credit facility affirmed at 'A-'; --Commercial Paper affirmed at 'F2'. Philip Morris International Philip Morris International, (PMI) based in Lausanne, Switzerland, held a 15.5% share of the international cigarette market in 2005. Its brands, led by Marlboro and L&M, are sold in over 160 countries around the world. (PMI See Private Mortgage Insurance. ) --Credit facility affirmed at 'BBB+'. Philip Morris Capital Corp. (PMCC PMCC Product Moment Correlation Coefficient PMCC Postmark Collectors Club PMCC Professional Military Comptroller Course PMCC Packet Mode Channel Connect PMCC Project Management Core Competency PMCC Pensky-Martens Closed Cup test ) --Issuer Default Rating (IDR) affirmed at 'BBB+'; --Senior unsecured debt affirmed at 'BBB+'; --Commercial paper affirmed at 'F2'. Altria Finance (Cayman Islands) Ltd. --Commercial paper affirmed at 'F2'. The rating affirmations follow Altria's Board of Director's announcement of it intent to finalize its decision in January 2007 with regard to the distribution of all Kraft shares owned by the company. Altria owns approximately 88.6% of Kraft. Fitch upgraded Altria's and its consolidated subsidiaries' long-term debt ratings and IDRs on May 16, 2006, reflecting improvements in the litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. environment and the operating environment for domestic tobacco. Fitch's current ratings of Altria and its consolidated subsidiaries indicate that the amount of debt at the subsidiary level would not be materially different than if they were on a stand-alone basis. As a result, Fitch does not anticipate any rating changes as a consequence of the spin-off. However, Fitch will review the ratings upon completion of the spin-off and each entity's capital structure and financial strategy. Nonetheless, Kraft still exhibits operating weakness, and improvement of its financial performance would strengthen its credit profile. Credit ratings for Altria are at a lower level than the strong metrics indicate due to the ongoing, albeit reduced, tobacco litigation risk. A continued reduction in such risk would be a positive for Altria's ratings. Fitch will continue to monitor significant litigation. Altria's leverage ratio of total debt-to-EBITDA was 1.1 times (x) for the latest 12 months ended June 30, 2006, EBITDA-to-interest expense was 12.4x, and free cash flow defined as cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses less capital expenditures and dividends was $4.4 billion. Altria's leverage ratio excluding Kraft was total debt-to-EBITDA 0.8x for the latest 12 months ended June 30, 2006, EBITDA-to-interest expense was 13.4x, and free cash flow was $3.3 billion. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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