S&P rates Ralcorp notes BBB-

Standard & Poor's said it assigned its BBB- senior unsecured debt rating to Ralcorp Holdings Inc.'s $300 million of 4.95% senior unsecured notes due August 2020, and affirmed the rating on its existing $300 million of 6.625% unsecured notes maturing in August 2039 and issued under the same indenture.

The company also added $150 million of 6.625% senior unsecured notes due August 2039 to the existing tranche, bringing the total to $450 million, S&P stated.

The agency said it expects the company to use net proceeds from the debt offering primarily to fund a portion of the $1.2 billion acquisition of American Italian Pasta Co., S&P said.

Following the transaction, pro forma credit protection measures are weaker, including an estimate of total debt-to-EBITDA of about 3.3x, the agency said.

S&P said it expects Ralcorp to generate good levels of free cash flow and apply it to debt reduction to strengthen credit measures over the next two years.

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