Fitch puts Sara Lee on evolving watch

Fitch Ratings said it placed Sara Lee Corp.'s BBB long-term issuer default rating, senior notes rating and bank credit facility rating on Rating Watch evolving.

The agency also placed on evolving watch the BBB long-term issuer default rating and senior notes rating of wholly owned subsidiary Sara Lee/DE Global Finance BV.

The watch reflects that significant uncertainty exists as Sara Lee nears its targeted completion for the spinoff of the International Beverage business before its June 2012 fiscal year-end, according to the agency.

Sara Lee's commitment to maintain investment grade credit profiles and targeted gross leverage, with a total debt to EBITDA, of about 2.0 times for each entity provides support for the ratings to remain at the current level, according to the agency.

For the fiscal year ended July 2, 2011, Sara Lee's total debt-to-operating EBITDA was 2.1x, funds from operations adjusted leverage was 4.8x, and operating EBITDA-to-gross interest expense was 9.7x.

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