S&P: Kellogg on negative watch

Standard & Poor's said it placed the BBB+ long term corporate credit rating and senior unsecured debt ratings on Kellogg Co. on CreditWatch with negative implications.

The company's A-2 short-term and commercial-paper ratings remain unchanged.

The CreditWatch placement follows news that Kellogg will be acquiring Pringles for $2.7 billion, funded with about $2 billion in new debt and international cash, S&P said.

The transaction will weaken Kellogg's credit protection measures below current levels, specifically the ratio of lease- and pension-adjusted total debt-to-EBITDA of more than 3x, the agency said.

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