Bulletin: Constellation Brands Inc. Announces Dividend Payment; Ratings Are Unaffected

NEW YORK (Standard&Poor's) April 9, 2015--Standard&Poor's Ratings Services said today that its ratings on Constellation Brands Inc. (BB+/Stable/--) are unaffected by the company's announced dividend payment. Constellation Brands declared an initial quarterly dividend of $0.31 per share of Class A common stock and $0.28 per share of Class B common stock, and is targeting a dividend payout ratio of 25% to 30% of comparable basis net income. We expect this will result in approximately $250 million in annual dividends. Although this will pressure discretionary cash flows over the next year as the company significantly increases capital expenditures to build out manufacturing capacity, we do not expect credit measures to weaken and continue to believe the company

...NEW YORK (Standard & Poor's) April 9, 2015--Standard & Poor's Ratings Services said today that its ratings on Constellation Brands Inc. (##+/Stable/--) are unaffected by the company's announced dividend payment. Constellation Brands declared an initial quarterly dividend of $0.31 per share of Class A common stock and $0.28 per share of Class B common stock, and is targeting a dividend payout ratio of 25% to 30% of comparable basis net income. We expect this will result in approximately $250 million in annual dividends. Although this will pressure discretionary cash flows over the next year as the company significantly increases capital expenditures to build out manufacturing capacity, we do not expect credit measures to weaken and continue to believe the company will slowly improve leverage beyond fiscal 2016 (ending February 2016), when capital expenditures materially decline and cash flows strengthen. We believe debt to EBITDA will likely improve to just under 4x over the next 2 years,...

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