Fitch lowers United Biscuits

Fitch Ratings said it downgraded United Biscuits Group's senior subordinated notes to B- from B+. Fitch also downgraded United Biscuits Finance plc's £165 million 10.75% senior subordinated notes due 2011 and €192.8 million 10.625% senior subordinated notes due 2011 to B- from B+, and Regentrealm Ltd.'s £482 million senior secured facilities to BB from BB+ and its senior unsecured facilities to B from B+.

The outlook is stable.

Following the information provided in United Biscuits' first half 2004 results, Fitch has downgraded the ratings on the group's senior subordinated notes by two notches to B- and resolved the negative Rating Watch.

Fitch noted the continued margin pressure that United Biscuits faces in its main U.K. market from both retailers and competitors. It also believes that in the short term, higher interest payments, additional restructuring charges and marketing spending will continue to affect the company's free cash flow generation. However, Fitch acknowledges that the refinancing of the senior facilities in August has deferred the amortization pressure that the company was expected to face from 2005 onwards.

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