Moody's Places Lorillard (LO) on Review for Downgrade

Moody's Investors Service placed Lorillard Tobacco Company's (NYSE: LO) Baa2 senior unsecured ratings on review for downgrade following its announcement it had signed a definitive agreement to be acquired by Reynolds American, Inc for approximately $27.4 billion, including the assumption of net debt. Closing is subject to standard regulatory approvals.

The review reflects Moody's uncertainty regarding Lorillard's pro forma capital structure and the likelihood of a meaningful increase in leverage for the combined company. To the extent that Lorillard's debt is repaid as part of the transaction, Moody's expects that it would withdraw the ratings on Lorillard's debt.

Moody's placed the following ratings of Lorillard Tobacco Company (guaranteed by Lorillard, Inc.) on review for downgrade:

- Senior Unsecured debt at Baa2

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