Atria Group Inc. (MO) credit rating was slashed by two notches to BBB from A- at S&P Global Ratings, following the cigarette maker's recent announcements of a $12.8 billion investment () in e-cigarette startup Juul Labs Inc. and a $1.8 billion investment ( ) in cannabis company Cronos Group Inc. (CRON.T). Altria's stock slipped 0.8% in premarket trade. That leaves Altria's credit rating just two notches above junk status. S&P said the rating outlook is stable. "We do not believe Juul or Cronos will provide significant near-term investment returns to Altria," S&P said in a statement. "Given Altria's track record of high shareholder returns, we do not expect the company to deleverage meaningfully from pro forma levels in the next few years." S&P said its downgrade also reflects growing uncertainty over how the Food and Drug Administration and state regulators could affect tobacco and non-tobacco product. Altria shares have dropped 28% year to date through Wednesday, while the S&P 500 has declined 6.2%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
December 20, 2018 10:02 ET (15:02 GMT)
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