16.07.2012 18:27
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Kraft Foods Group, Inc. -- Moody's assigns Baa2 to Kraft Foods Group exchange notes

$3.6 billion of notes offered in exchange for parent company debt as part of spin-off plan

New York, July 16, 2012 -- Moody's Investors Service has assigned Baa2 long-term senior unsecured debt ratings to $3.6 billion of proposed senior unsecured exchange notes to be issued by Kraft Foods Group, Inc. ("Kraft Foods Group" or "KFG") on July 18th 2012 in connection with its planned spin-off by parent company Kraft Foods Inc. ("Kraft") to shareholders. The completion of this exchange offer will conclude the migration of $10 billion of debt from Kraft to KFG as part of the spin-off plan. The rating outlook is stable.

Kraft plans to distribute all the common stock of KFG to shareholders later this year in a tax free spin-off that will result in two separate publicly-traded entities: Kraft Foods Group, Inc., Kraft's North American grocery subsidiary, and Mondelez International, Inc., Kraft's global snacks business that will remain. Prior to the spin-off, Kraft will capitalize Kraft Foods Group with a total of $10 billion of debt, including $400 million of preexisting KFG debt, $6 billion of senior unsecured notes that were issued by KFG in June, and $3.6 billion of exchange notes that will be issued by KFG this week.

RATINGS RATIONALE

Kraft Foods Group's Baa2/Prime-2 ratings are supported by strong operating margins, stable earnings and cash flow, leading category market shares, and a broadly-diversified portfolio of branded packaged food products. These credit strengths are balanced against the company's high geographic concentration of revenues in the low-growth U.S. food industry, and Moody's anticipation of future operational challenges following the spin-off including inefficiencies related to fixed cost absorption and possible uneven sales performance due to a recent shift from an in-house to a brokered retail sales force for some of its customers. The rating also reflects external challenges the company will face including a sustained sluggish U.S. economy, intense category competition and high input costs.

Ratings assigned:

(Offering amounts are based on the debt exchange offer launched June 18 as amended on July 2, and are subject to final allocations to be completed on or around July 18th, 2012)

Kraft Foods Group, Inc.

$1,032,429,000 of 6.125% senior unsecured notes due 2018 at Baa2;

$900,000,000 of 5.375% senior unsecured notes due 2020 at Baa2;

$880,520,000 of 6.875% senior unsecured notes due 2039 at Baa2;

$787,051,000 of 6.500% senior unsecured notes due 2040 at Baa2.

The rating outlook is stable.

Under the terms of the debt exchange offer launched June 18 as amended on July 2, Kraft Foods Group is offering a total of $3.6 billion of senior unsecured notes in four tranches: i) $1 billion of 6.125% KFG notes due 2018 in exchange for Kraft notes due 2018 ii) $900 million of 5.375% KFG notes due 2020 in exchange for Kraft notes due 2020; ii) $881 million of 6.875% KFG notes due 2039 in exchange for Kraft notes due 2031, 2037, 2038, and 2039; and $787 million of 6.5% KFG notes due 2040 in exchange for Kraft notes due 2040. The exchange offer will expire on July 16, unless extended, and the exchange notes will be issued two days later.

The long-term debt of KFG, including the proposed exchange notes, will be guaranteed by Kraft up until the time of the spin-off later this year. Thereafter, the guarantees will fall away and KFG will be the sole obligor. Any commercial paper issued by KFG prior to or after the spin-off will not be guaranteed by Kraft.

Proforma for the spin off, financial leverage at Kraft Foods Group is modest (Moody's adjusted debt/EBITDA is below 3.5 times) and liquidity is solid. Details of Kraft Foods Group's financial policy have not been disclosed, however, Moody's assumes periodic strategic acquisitions, a dividend payout rate of at least 60% of earnings, and limited share repurchase activity.

A rating upgrade could occur if Kraft Foods Group sustains stable operating performance and conservative financial policy, and debt/EBITDA falls below 3.0 times. A rating downgrade could occur if the company's operating performance weakens or financial policy becomes more aggressive such that EBITDA margins fall below 15% or debt/EBITDA approaches 4.0 times.

Proforma for the spin off, Kraft Foods Group generates approximately $18 billion in annual sales making it the world's third largest packaged foods company behind Nestle and PepsiCo. Its broadly-diversified portfolio of well-known branded packaged foods include Kraft macaroni and cheese, Oscar Mayer meats, Philadelphia cream cheese, Maxwell House coffee, Capri Sun beverages, Jell-O desserts and Miracle Whip salad dressing.

The principal methodology used in rating Kraft Foods Group was the Global Packaged Goods Industry Methodology published in July 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating. Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Brian Weddington, CFA VP - Senior Credit Officer Corporate Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Peter H. Abdill, CFA MD - Corporate Finance Corporate Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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Analysen zu Kraft Foods (A)

  • Alle
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03.10.2012Kraft Foods outperformRBC Capital Markets
02.10.2012Kraft Foods buyStifel, Nicolaus & Co., Inc.
11.09.2012Kraft Foods outperformRBC Capital Markets
07.09.2012Kraft Foods buyUBS AG
03.09.2012Kraft Foods haltenHamburger Sparkasse AG (Haspa)
03.10.2012Kraft Foods outperformRBC Capital Markets
02.10.2012Kraft Foods buyStifel, Nicolaus & Co., Inc.
11.09.2012Kraft Foods outperformRBC Capital Markets
07.09.2012Kraft Foods buyUBS AG
31.08.2012Kraft Foods buyUBS AG
03.09.2012Kraft Foods haltenHamburger Sparkasse AG (Haspa)
21.05.2012Kraft Foods haltenHamburger Sparkasse AG (Haspa)
07.05.2012Kraft Foods sector performRBC Capital Markets
28.02.2012Kraft Foods haltenHamburger Sparkasse AG (Haspa)
23.12.2011Kraft Foods haltenHamburger Sparkasse AG (Haspa)
14.09.2009Kraft Foods verkaufenEuro am Sonntag
02.02.2007Kraft Foods underweightPrudential Financial
02.02.2007Kraft Foods underperformDA Davidson
30.01.2007Kraft Foods reduceUBS
01.11.2006Cadbury Schweppes underweightJP Morgan
Um die Übersicht zu verbessern, haben Sie die Möglichkeit, die Analysen für Kraft Foods (A) nach folgenden Kriterien zu filtern.

Alle: Alle Empfehlungen
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Hold: Halten-Empfehlungen wie z.B. "halten" oder "neutral"
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