S&P cuts Kraft Heinz sterling notes

S&P said it lowered its issue-level rating on Kraft Heinz Co.’s (KHC) 6.25% British pound sterling notes due in 2030 to BB+ from BBB- and revised the recovery rating to 3 (50%-70%; rounded estimate: 65%) from 1.

The downgrade follows the release of collateral that had been securing the notes, S&P said. However, the notes continue to be guaranteed by the subsidiary Kraft Heinz Foods Co.

The agency also assigned a BB+ rating to the $3.9 billion extended portion of the $4 billion revolver.

S&P said it withdrew the BBB- rating on the second-lien notes due in 2025 and BB+ rating the $300 million 3.375% senior notes due in 2021, both of which were redeemed as part of the tender/refinance transaction completed in June.

The agency also withdrew the BB+ ratings on the now matured 2.8% notes due July 2, and Canadian dollar floating-rate notes due July 6.

“The recovery rating on group’s senior unsecured debt remains 3; however, the rounded recovery estimate is revised to 65% from 60% following the removal of substantially all secured debt from the capital structure,” S&P said in a press release.

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