S&P affirms Kellogg

Standard & Poor's said it affirmed all ratings, including the BBB+ corporate credit rating, on Kellogg Co. The agency also removed the ratings from CreditWatch, where they had been placed with negative implications on Feb. 15 following the company's announcement that it would acquire Pringles for roughly $2.7 billion.

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

"The ratings affirmation reflects our expectation that Kellogg will apply excess cash flow to debt reduction during the next two years through the maintenance of an EBITDA margin of at least mid- to high-teens, positive working capital from Pringles, capital expenditures not exceeding 5% of sales and curtailment of its share repurchases," said S&P credit analyst Bea Chiem in a news release.

The outlook is negative, reflecting S&P's belief that it could lower the ratings if Kellogg is unable to reduce and sustain leverage below 3x by 2014.

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