Fitch upgrades Kellogg

Fitch Ratings said it upgraded Kellogg Co.'s long-term issuer default rating, senior unsecured debt rating and bank credit facility to A- from BBB+. The long-term issuer default ratings of Kellogg Europe Co. Ltd. and Kellogg Holding Co. Ltd. were also upgraded to A- from BBB+.

The short-term issuer default ratings and commercial paper ratings were affirmed at F2.

The outlook is stable.

The agency said Kellogg's ratings incorporate its leading market share positions, strong brand equity, solid top-line growth, rising operating earnings, clear and balanced financial strategy and its significant liquidity and high margins for the industry. Operating profit rose 9.2% in the first quarter, and Kellogg's margins are expected to remain among the highest in the packaged foods sector despite modest margin deterioration in the near term primarily as a result of input cost inflation.

The total debt-to-operating EBITDA ratio was about 2.4 times for the last 12 months ended March 29.

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