Moody's to confirm Kraft's Cadbury bonds

Moody's Investors Service said if Kraft Foods Inc.'s consent solicitation of its £650 million of Cadbury sterling bonds is successful, the ratings on these bonds likely would be confirmed at Baa2.

This would conclude Moody's rating review for possible downgrade of the Baa2/Prime-2 long-term and short-term ratings of Cadbury Holdings Ltd., Cadbury Schweppes Investments plc, and Cadbury Schweppes Finance plc that began on Nov. 9, 2009.

The bonds consist of £300 million of 5.375% bonds due Dec. 11, 2014 and £350 million of 7.250% bonds due July 18, 2018. Not included in the solicitation is £77 million of 4.875% bonds that will be paid when due on Dec. 20, 2010.

Kraft's Baa2 rating is supported by its global market presence, leading category market shares,and its broadly diversified portfolio of branded packaged food products - strengths that will be enhanced by the addition of Cadbury's strong franchise brands, access to fast-growing developing markets and its significant clout in the global confectionary business, the agency said.

These strengths are offset by elevated financial leverage that resulted from the Cadbury acquisition completed on Feb. 2, material integration risks and a history of aggressive financial policy, the agency noted.

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