S&P Downgrades Kellogg Debt After Recent Acquisitions, Share Buybacks

Standard & Poor's downgraded ratings on Kellogg Co. Thursday, citing higher debt levels following recent acquisitions and continued share buybacks. The agency cut the rating by one notch to BBB from BBB-plus, placing it just two notches above speculative, or junk, status. The outlook is stable, meaning that S&P is not expecting to downgrade again any time soon. "While profitability is expected to modestly improve with the company's cost reduction efforts, we believe that debt leverage will remain above 3x and funds from operations to debt below 25%," the agency said in a statement. Kellogg had about $8 billion of debt outstanding as of Oct. 3, it said.