Fitch rates Campbell notes an 'A', maintains outlook

by Eric Schroeder
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CHICAGO — Fitch Ratings has assigned an "A" rating to Camden, N.J.-based Campbell Soup Co.’s proposed $300 million senior unsecured notes due 2014 while maintaining its "stable" outlook for the company.

The action included assigning an "A" rating to Campbell’s long-term issuer default rating, senior unsecured debt and senior unsecured credit facility. The company’s short-term issuer default rating and commercial paper were rated "F1" by Fitch.

"Campbell’s ratings and outlook are based on a continuation of the company’s balanced financial strategy," Fitch said. "The ratings incorporate Campbell’s leading position in the high margin soup category and the strength of its branded product portfolio. The ratings also consider the mature and highly competitive nature of the U.S. soup market. Campbell’s overall profitability as measured by EBITDA margins is among the best in the packaged food industry."

Fitch said Campbell’s credit metrics are "slightly stronger" than the rating agency’s expectations, and noted that the company still has $909 million remaining on its $1.2 billion three-year share repurchase plan through fiscal 2011. According to Fitch, those funds give Campbell the financial flexibility to pursue its previously stated modest-sized bolt-on acquisition strategy.

"Acquisitions are likely to be within the company’s core categories of simple meals, baked snacks and healthy beverages," Fitch said.

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