Moody's downgrades Kellogg to Baa2

Moody's Investors Service said it lowered the long-term ratings of Kellogg Co. and subsidiaries, including its senior unsecured debt rating to Baa2 from Baa1.

This action concludes the review for downgrade that began on Nov. 19 following Kellogg's announcement of weaker-than-expected operating performance, especially in U.S. cereals and snacks, and a major restructuring program that will limit its capacity for future debt reduction.

The agency also affirmed the company's Prime-2 short-term rating, which was not under review.

The outlook is stable.

Moody's said the downgrade is based its anticipation of continued soft operating performance in the core U.S. cereal and U.S. snacks businesses that has slowed the pace of deleveraging following the $2.7 billion Pringles snacks acquisition in June 2012.

In addition, the company's decision to embark on a costly restructuring program and return to share repurchases before it has fully restored its credit profile, was a key driver of the ratings downgrade, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.