Fitch rates Kimberly-Clark notes A

Fitch Ratings assigned an A rating to Kimberly-Clark Corp.'s $500 million 7½% senior notes due Nov. 1, 2018. Kimberly-Clark has an A issuer default rating and F1 short-term issuer default rating. Its $1.5 billion revolving credit facility and senior unsecured notes and debentures are rated A, and its commercial paper is rated F1.

The outlook is stable.

Proceeds will be primarily used to repay commercial paper.

The agency said Kimberly-Clark's ratings reflect strong liquidity, solid cash flow generation, credit metrics well within the rating category, significant scale and leading market shares in a relatively non-cyclical industry.

The company's ability to pass through price increases and continued focus on cost reduction is also a key element to the rating because of a long-term trend of EBITDA margin declines, Fitch said. EBITDA margins were down roughly 200 basis points in the nine months ended Sept. 30 due to accelerating commodity costs.

Excluding the debt associated with the company's variable-interest entities, the debt-to-EBITDA ratio was 1.8 times at Sept. 30.

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