S&P downgrades Danone, debt to BBB+

S&P said it lowered its long-term corporate credit rating on Danone SA to BBB+ from A- and placed the rating on CreditWatch with negative implications.

The short-term corporate credit rating was affirmed at A-2.

The agency also downgraded the long-term issue ratings on Danone's senior unsecured debt to BBB+ from A- and placed the ratings on CreditWatch Negative. It affirmed the short-term issue rating at A-2.

S&P said the downgrade and CreditWatch placement follow the announcement that Danone made a $12.5 billion offer to acquire WhiteWave Foods Co. The acquisition materially increases the debt leverage of Danone, meaning that its credit metrics will no longer be compatible with an A- rating.

Once it makes a detailed assessment of the capacity of the combined group to repay debt with internal cash flow and additional funding sources, taking into account its understanding of the company's financial policy, the agency said it could affirm or lower the BBB+ long-term ratings by an additional notch to BBB.

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