S&P may cut Sara Lee

Standard & Poor's said that it affirmed Sara Lee Corp.'s BBB long-term corporate credit rating and A-2 short-term corporate credit and commercial paper ratings.

The outlook is stable.

S&P said it placed the BBB senior debt rating on CreditWatch with negative implications.

The rating affirmation reflects S&P's review of Sara Lee's preliminary plan regarding its board of directors' decision to divide the company into two separate, publicly traded companies and expected financial policies for the continuing entity, the agency said.

The CreditWatch placement reflects the concern that this debt may be structurally subordinated, S&P said.

Sara Lee will continue to have a satisfactory business risk profile, albeit somewhat weaker than the consolidated Sara Lee's current profile due to a more narrow business and geographic focus, the agency said.

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