Moody’s gives Kellogg notes Baa2

Moody's Investors Service said it assigned Baa2 ratings to the $1 billion of senior notes being offered by Kellogg Co.

The outlook is stable.

Net proceeds from the new notes, being offered in three-year and 10-year tranches, will be used primarily to refinance debt, including $400 million of commercial paper that was issued in early May to partially fund the acquisition of ownership interests in two West African food companies and $400 million of 3.25% senior notes due May 21, 2018.

In addition, Kellogg is contemplating making a one-time $200 million to $300 million pre-tax pension contribution that would reduce adjusted debt.

"The Tolaram investment resulted in a slight increase in financial leverage to about 4.2x from 4.1x debt/EBITDA at the end of 2017,” Brian Weddington, Moody's senior credit officer, said in a news release.

“However, this should be offset over the course of the year by improved profitability and a modest reduction in debt."

© 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.