Fitch rates Kellogg's notes BBB+

Fitch Ratings said it assigned a BBB+ rating to Kellogg Co.'s $750 million 5 1/8% senior unsecured notes due Dec. 3, 2012.

Kellogg has a long-term issuer default rating, senior unsecured debt rating and bank credit facility rating of BBB+, and a short-term issuer default rating and commercial paper rating of F2.

The outlook is positive.

Proceeds will be used to repay a portion of its outstanding U.S. commercial paper.

Fitch said the ratings incorporate its leading market share positions, strong brand equity and consistency in operating earnings. The ratings also are supported by the company's clear and balanced financial strategy, as well as its high level of liquidity, the agency said.

Moody's rates Kellogg notes A3

Moody's Investors Service said it assigned an A3 rating to Kellogg Co.'s $750 million five-year senior unsecured notes due 2012 and affirmed the ratings on its existing debt, including a Prime-2 short-term rating for commercial paper.

The outlook is stable.

Proceeds will be used to reduce outstanding commercial paper.

Kellogg's ratings reflect excellent brand strength and market performance in ready-to-eat cereal and snacks that have been consistent drivers of sales momentum and high operating margins, the agency said.

The ratings anticipate ongoing pressure on gross margins from higher fuel and commodity costs, and Kellogg's limited ability to offset these higher costs through price increases, Moody's said. The ratings also incorporate Kellogg's limited free cash flow generation in recent years due to shareholder distributions.

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