Fitch upgrades Kraft Heinz

Fitch Ratings said it upgraded the long-term issuer default ratings of the Kraft Heinz Co. (KHC) and its subsidiary, Kraft Heinz Foods Co. (Kraft Heinz) and their unsecured debt to BBB from BBB-.

“The upgrade reflects Kraft Heinz's demonstrated commitment to debt reduction and tighter leverage metrics along with strong results that support its market-leading position in the U.S. packaged food space. Fitch expects KHC will sustain the improved operating trajectory relative to its pre-pandemic profile given portfolio optimization and repositioning to enable it to focus on faster-growing categories and geographies,” the agency said in a press release.

The agency noted KHC has paid down $1.15 billion of debt year to date, including 2022 debt maturities ($700 million) and through open market purchases.

Fitch said it forecasts at least flat organic sales growth and EBITDA (pro forma for asset sales) in the high $5 billion range over the medium term while maintaining gross debt/EBITDA at around 3.5x.

The outlook is stable.

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