Moody’s lowers Campbell Soup debt to A3

Moody's Investors Service said it downgraded the credit ratings of Campbell Soup Co., including its long-term senior unsecured debt to A3 from A2 and short-term debt to Prime-2 from Prime-1.

The outlook is stable. This action concludes the review for downgrade that began on June 19.

Moody’s said the downgrade reflects continuing soft sales performance in Campbell's core business lines – especially U.S. soups and U.S. beverages that, along with a series of leveraged acquisitions, has eroded the company's profit margins and weakened its liquidity profile.

The agency believes that the operating environment will become more challenging for Campbell over the next 18 months in core segments, which may put further pressure on its ratings. In addition, the company's plans to grow partly through acquisitions and to reinstate share repurchases could lead to a further downgrade if its strategies become aggressive, Moody’s said.

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