Moody's affirms United Biscuits

Moody's Investors Service said it has affirmed the B1 corporate family rating of United Biscuits Finance plc with a stable outlook following the announced transaction with Kraft Foods, Inc.

Under the agreement, expected to close in the third quarter of 2006, Kraft will cede its interest in United Biscuits in return for assuming $548 million of that company's debt in addition to acquiring its Southern European operations. The proceeds from the transaction will be used to redeem the two outstanding euro and sterling high-yield bonds due 2011.

The outlook is stable, which reflects Moody's opinion that the company will continue to be strongly positioned within its core markets and to adapt to the trend toward healthier snack foods.

In light of modest market growth, an upward revision of the ratings or outlook would likely result from brand out-performance resulting in strong cash flows and further debt amortization.

Downward pressure on the ratings could occur if market trends deteriorate, leading to a weakening in the company's key credit metrics.

Ratings affirmed are United Biscuit's B1 corporate family rating, B3 rating for the £165 million senior subordinated notes (to be withdrawn following redemption) and B3 rating for the €192.5 million senior subordinated notes (to be withdrawn following redemption); and Regentrealm Ltd.'s Ba3 rating of the remaining £367.8 million senior secured credit facilities A and B and revolving credit facility, B1 rating of the £200.9 million senior secured credit facility "first loss" term loan C borrowed at United Biscuits (UK) Ltd.

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