Reynolds American Inc. -- Moody's Downgrades Reynolds American to Baa3; Outlook Stable

New York, June 09, 2015 -- Moody's Investors Service ("Moody's") today downgraded Reynolds American Inc's senior unsecured rating to Baa3. This concludes the ratings review that was initiated on July 15, 2014 following the company's announcement of its intention to acquire Lorillard, Inc. for approximately $27 billion. "The downgrade reflects our expectation of much higher leverage as a result of the transaction, as well as execution risk in achieving synergies in a timely fashion," said Nancy Meadows, a Moody's Vice President and Senior Analyst. "We think the strategic rationale for the combined company is sound, and there are likely to be meaningful synergies, which will bring credit metrics back into a range appropriate for an investment grade rating over the next 12 to 18 months." The outlook is stable.

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