Altria Group Inc.'s Proposed Notes Rated 'BBB'

CHICAGO (S&P Global Ratings) Feb. 11, 2019--S&P Global Ratings said today that 
it assigned its 'BBB' issue level rating to Altria Group Inc.'s proposed 
senior unsecured Euro-denominated notes. The Richmond, Va.-based tobacco group 
will draw from its shelf registration statement filed Oct. 26, 2017. We expect 
Altria will use the net proceeds from the note offerings to prepay outstanding 
borrowings under its bridge term loan, which was used to finance the company's 
investment in JUUL Labs Inc. Altria's primary operating subsidiary, Philip 
Morris USA Inc., which accounts for the majority of group profitability, will 
guarantee the proposed notes. The transaction does not meaningfully impact 
credit metrics.

All of our existing ratings on the company, including our 'BBB' issuer credit 
rating, are unchanged. The outlook is stable.

Our ratings on Altria reflect the company's dominant position in the U.S. 
tobacco industry with significant pricing power, market share, and brand 
equity; its strong profitability and free cash flow, and a good track record 
of managing litigation and regulatory risks. While potential growth from JUUL 
and Cronos could help offset the secular decline in Altria's legacy tobacco 
business, we do not expect these investments to contribute meaningfully to 
Altria's profits over the next few years. Statements and actions by U.S. Food 
& Drug Administration over the last couple of years have increased regulatory 
uncertainty for the tobacco industry. Nonetheless, our ratings assume FDA 
actions in the near term will not be disruptive enough to lead to meaningful 
near-term profit deterioration in Altria's legacy business.
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