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ConAgra and Ralcorp facing ratings review on deal

Associated Press Published: November 27, 2012

Moody's Investors Service Inc. said Tuesday that it is reviewing ConAgra's "Baa2" long-term senior unsecured credit rating and "Prime-2" short-term rating for possible downgrade, as well as some other ratings. The ratings agency said that ConAgra's credit profile would deteriorate materially if the deal goes through.

Moody's said that it anticipates that any downgrade would likely be limited to one notch, based on the financing terms disclosed.

The ratings agency said that Ralcorp's ratings are under review for a possible upgrade. That includes the St. Louis company's "Baa3" long-term senior unsecured rating.

Moody's said the potential upgrade is because the acquisition may result in a combined company that has a stronger credit profile than Ralcorp currently has.

Moody's also said Ralcorp's debt ratings may be upgraded one notch.

ConAgra shares rose $1.34, or 4.7 percent, to close at $29.63. Ralcorp surged by $18.57, or 26.4 percent, to close at $88.80.