S&P lowers Avon to negative

Standard & Poor's said it affirmed BBB- corporate credit rating on Avon Products Inc. and revised the outlook to negative from stable.

S&P also said it affirmed the BBB- ratings on Avon's senior unsecured debt and A-3 commercial-paper rating.

The negative outlook reflects Avon's continuing poor operating results and weak credit metrics, S&P said.

The ratings reflect the company's weaker credit metrics and a change in the company's liquidity to adequate from strong, the agency said.

The ratings also consider that the company's business risk profile will remain satisfactory as Avon continues to sustain its good market share in the direct sales channel, S&P said.

Avon continues to have large scale and geographic diversity, which can generally compensate for regional weaknesses, if the company is operating efficiently, the agency said. Its diverse operating base also helps offset the effect of foreign-currency fluctuations in regional markets, S&P added.

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