Kraft Heinz Company (KHC)

[bar1080]

"Kraft Heinz falls to junk status at Fitch Ratings"

* "Fitch Ratings lowers its long-term default rating on Kraft Heinz (KHC -2.1%) to BB+ from BBB-, while setting a Stable outlook. The BB level at Fitch is non-investment grade (junk).

* Fitch notes that Kraft's decision to maintain its annual dividend of $1.60 per share removed a near term deleveraging option.

* "The downgrade reflects Fitch's view that Kraft's leverage will remain elevated above 4x for a prolonged period due to ongoing EBITDA challenges and limited near term debt reduction potential. Following Kraft's commentary around 2020 operating headwinds which would suggest a nearly 8% EBITDA decline and its commitment to maintain its dividend as announced Feb. 13, 2020, Fitch estimates the company may need to divest up to 20% of its projected 2020 EBITDA to support debt reduction necessary to reduce leverage to below 4.0x versus 2019 leverage of 4.8x."

https://seekingalpha.com/news/3542248-kraft-heinz-falls-to-junk-status-fitch-ratings