S&P rates Kellogg bonds BBB+

Standard & Poor's said it assigned its BBB+ senior unsecured debt rating to Kellogg Co.'s €500 million bonds due 2021.

Kellogg intends to use the proceeds from this offering for general corporate purposes, including the repayment of a portion of the company's commercial paper borrowings.

The BBB+ corporate credit rating reflects Kellogg's "strong" business risk profile, S&P said. Key credit factors considered in assessing Kellogg's business risk profile include its well-recognized brands, leading market positions in the ready-to-eat cereal and snack food industries, and good product and geographic diversity.

These factors are partially offset by the company's exposure to volatile commodity costs and participation in the highly competitive cereal market, which has experienced slower growth in the U.S. Kellogg's "significant" financial risk profile reflects S&P's expectation that leverage will remain near 3x and funds from operations to debt near 22%.

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