S&P downgrades Kellogg

Standard & Poor’s said it lowered the long-term ratings, including the corporate credit rating, on Kellogg Co. to BBB from BBB+.

The agency also said it affirmed the company’s short-term corporate credit and commercial-paper ratings at A-2.

The downgrade reflects a belief that Kellogg’s credit measures will not improve because debt levels are expected to be elevated due to recent acquisitions and continued share repurchases, S&P said.

While profitability is expected to modestly improve with the company’s cost reduction efforts, the agency said it believes that debt leverage will remain at more than 3x.

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