Kraft Will Probably Keep Investment Grade Rating, According To Moody's
January 19, 2010 4:17 PM
Moody's Investors Service said food giant Dow Kraft (NYSE: KFT), a member of the Dow Jones Industrial Average, will likely keep its investment grade rating despite news that the company will acquire rival Cadbury (NYSE: CBY) for $19.5 billion.
Moody's said Kraft's Baa2 long-term and Prime-2 short-term ratings are under review for possible downgrade. One-notch downgrades would put Kraft at the bottom of the investment grade ratings ladder.
Moody's said the debt Kraft plans to take on as a result of the purchase exceeds the normal parameters for investment grade ratings. Kraft has been trying to acquire Cadbury for several months and has consistently boosted its offers to get the deal done.
Warren Buffet's Berkshire Hathaway (NYSE: BRK-A, BRK-B) is one of Kraft's largest shareholders.
