Fitch Rates R.J. Reynolds' Proposed $500MM Debt Offering 'BB+'.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 assigned a 'BB+' rating to R.J. Reynolds Tobacco Holdings, Inc.'s (RJR RJR R.J. Reynolds RJR Thorny Skate (FAO fish species code) ) proposed $500 million private offering of guaranteed secured notes. The notes are guaranteed by Reynolds American Reynolds American, Inc. (NYSE: RAI) is an American company whose holdings include R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, Forsyth Tobacco, Lane Limited, Conwood Company (formerly American Snuff Company), and R.J. Reynolds Global Products, Inc. Inc., R.J. Reynolds Tobacco Company (RJRT RJRT R.J. Reynolds Tobacco Company ), and certain other material subsidiaries. In conjunction with the offering RJR has announced a cash tender offer for any and all of its $500 million aggregate principal amount of 7 3/4% notes due 2006. Fitch rates RJR's guaranteed notes and bank credit facility 'BB+', and senior unsecured notes 'BB'. Rated debt securities outstanding total approximately $1.6 billion. The Rating Outlook is Stable. The ratings rely upon maintenance of conservative financial policies and a high degree of liquidity to manage the uncertainties surrounding tobacco-related 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. and the competitive tobacco operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. . There are several litigation rulings in high-profile cases - particularly the Department of Justice trial, Engle Appellate review and Price Appellate review - expected in the next several months that create heightened uncertainty for the major U.S. tobacco firms. While RJR, RJRT, and Brown & Williamson are not defendants in the Price case, they are defendants in similar 'lights' cases in the same jurisdiction that could be impacted by the outcome of Price. Favorable resolutions of the major cases could result in upward rating revisions. However, an adverse verdict with a multi-billion dollar judgment could result in a Negative Rating Watch through the appeal process. For the 12-month period ending March 31, 2005, total debt-to-EBITDA was 1.1 times (x) and EBITDA-to-interest was 17.1x. Cash flow from operating activities to total debt was 58.9%. Fitch's rating definitions are available on the agency's public web site, www.fitchratings.com. Published ratings, criteria and methodologies and 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 this site, at all times. This document will remain on the public site for seven days. |
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