U.K.-Based British American Tobacco PLC Outlook Revised To Negative On Share Buyback Announcement; Ratings Affirmed

On Feb. 11, 2022, British American Tobacco (BAT) posted positive 2021 full-year results broadly in line with our base case. At the same time, the company announced a new share buyback program of £2.0 billion, to complete by year-end 2022. The announced share buyback was not in our previous assumptions, and it will slow down the company's leverage reduction. We assume BAT will post S&P Global Ratings-adjusted debt to EBITDA slightly below 3.5x in 2022, broadly in line with 2021. We revised our outlook on BAT to negative from stable and affirmed our 'BBB+/A-2' long- and short-term issuer credit ratings on the company. The negative outlook reflects BAT's reduced rating headroom, stemming from greater discretionary spending than previously anticipated and

...February 11, 2022 - On Feb. 11, 2022, British American Tobacco (BAT) posted positive 2021 full-year results broadly in line with our base case. At the same time, the company announced a new share buyback program of ú2.0 billion, to complete by year-end 2022. - The announced share buyback was not in our previous assumptions, and it will slow down the company's leverage reduction. We assume BAT will post S&P Global Ratings-adjusted debt to EBITDA slightly below 3.5x in 2022, broadly in line with 2021. - We revised our outlook on BAT to negative from stable and affirmed our '###+/A-2' long- and short-term issuer credit ratings on the company. - The negative outlook reflects BAT's reduced rating headroom, stemming from greater discretionary spending than previously anticipated and industry volatility mainly associated with possible regulatory changes, litigation risks, and evolution in the expansion of new categories. LONDON (S&P Global Ratings) Feb. 11, 2022--S&P Global Ratings today took...

Ratings Action