...September 16, 2021 - British American Tobacco (BAT) plans to issue two perpetual subordinated hybrid instruments and use the proceeds for general corporate purposes, including the repayment of senior debt. - The amount remains subject to market conditions, but we anticipate that the ratio of hybrid debt to adjusted capitalization (as defined in our methodology) will be well below the 15% threshold at which we view a hybrid instrument as having intermediate equity content. - The subordinated notes have no maturity date, and the coupons are fixed until the first reset dates. We understand that BAT is committed to maintaining hybrid capital on its balance sheet for the long term. - The proposed transactions do not materially change BAT's adjusted credit metrics or our view of very limited rating headroom for the issuer credit rating on BAT (###+/Stable/--). - We assigned our '###-' issue rating to BAT's proposed hybrid instruments to reflect their subordination and optional deferability. We...
