Fitch rates Mondelez loan BBB

Fitch Ratings said it assigned a BBB rating to the new $1.5 billion 364-day facility being issued by Mondelez International, Inc.

The outlook is stable.

Fitch also said it affirmed the long-term issuer default rating and short-term issuer default rating at BBB and F2.

The agency also said it affirmed the BBB rating on Mondelez’s $4.5 billion credit facility due Oct. 21, senior unsecured debt rating at BBB and commercial-paper rating at F2.

Fitch also affirmed Mondelez International Holdings Netherlands BV’s senior unsecured debt at BBB.

Mondelez has secured a new $1.5 billion 364-day credit facility due February 2018.

The ratings reflect an expectation that Mondelez can achieve its target to improve EBIT margins from 15.6% in 2016 to 17% to 18% in 2018 on 1% to 2% annual organic revenue growth, the agency said.

The improvement will primarily be driven by the large restructuring program the company put in place in 2014 to realize $1.5 billion in annualized savings by 2018 in the areas of supply chain, overhead costs, and other organizational efficiencies, Fitch said.

The ratings are constrained by the company’s prolonged weakness in organic sales growth with Mondelez growing below industry-category sales and higher-than-expected investments needed to drive sales, the agency added.

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