Fitch gives BBB- to Kraft Heinz notes

Fitch Ratings said it assigned a BBB- rating to Kraft Heinz Foods Co.’s new three-, five- and 10-year senior unsecured notes.

Proceeds will be used to refinance upcoming bond maturities of $2.7 billion due in 2018, to wind down the U.S. securitization program with an outstanding balance of $659 million at March 31, to refinance commercial paper and for general corporate purposes.

The outlook is stable.

“The Kraft Heinz Co. (Kraft Heinz) generated $26 billion annual revenue in 2017. Its portfolio includes eight $1 billion-plus brands and many other large and well-known household brands,” Fitch said in a news release.

“Kraft Heinz is heavily exposed to the mature North American market, which makes up about 80% of sales and EBITDA.

“In addition, another 9% of its revenue comes from EMEA. Kraft Heinz's organic sales were down 1.5% in the first quarter of 2018, after declining 1% in 2017.

“Fitch expects full-year 2018 top-line growth to be flattish. Beyond 2018, Fitch forecasts that the overall organic growth rate to be modestly positive, assuming the North American and European businesses stabilize,” the agency added in the release.

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