Moody's rates Yum! notes Baa2, loans Baa1

Moody's Investors Service said it affirmed Yum! Brands, Inc.'s ratings and assigned a Baa2 non-guaranteed senior unsecured debt rating to the company's new $1.2 billion of 10- and 30-year notes. Moody's assigned a Baa1 rating to the company's $1.15 billion guaranteed senior unsecured bank credit facility.

The outlook is negative.

Moody's said the Baa2 non-guaranteed senior unsecured rating reflects the support provided by the company's scale, brand strength and diversification as well as adequate debt protection metrics and liquidity.

The agency said it remains concerned, however, with what it views as the adoption of a more aggressive financial policy with sizable share repurchases and increased dividend payouts, supported by higher debt levels and non-operating cash flows.

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