Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Interest Rates

At December 31, 2018 and 2017, the fair value of Altria’s long-term debt was $12.5 billion and $15.3 billion, respectively. The fair value of Altria’s long-term debt is subject to fluctuations resulting from changes in market interest rates. A 1% increase in market interest rates at December 31, 2018 and 2017 would decrease the fair value of Altria’s long-term debt by approximately $0.8 billion and $1.2 billion, respectively. A 1% decrease in market interest rates at December 31, 2018 and 2017 would increase the fair value of Altria’s long-term debt by approximately $0.9 billion and $1.3 billion, respectively.

Interest rates on borrowings under the Credit Agreement are expected to be based on the London Interbank Offered Rate (“LIBOR”) plus a percentage based on the higher of the ratings of Altria’s long-term senior unsecured debt from Moody’s and Standard & Poor’s. The applicable percentage based on Altria’s long-term senior unsecured debt ratings at December 31, 2018 for borrowings under the Credit Agreement was 1.0%. At December 31, 2018, Altria had no borrowings under the Credit Agreement.