: S&P downgrades Campbell Soup to one notch above junk-bond status

S&P Global Ratings lowered Campbell Soup’s cos. rating to BBB- from BBB on Monday, placing it one notch above speculative-grade, or junk, status. The move came after Campbell announced a $2.7 billion all-cash deal for Sovos Brands SOVO, parent of Rao’s pasta sauces and noosa yogurts, that it intends to fund by issuing new debt. “As a result, we forecast S&P Global Ratings-adjusted pro forma debt leverage will increase to about 4x at close from 2.8x for the 12-months ended April 30, 2023,” the rating agency said in a statement. “We do not forecast the company to restore leverage to the low-3x area until at leastfiscal 2026.” Campbell Soup has about $4.6 billion of debt. There were only sellers of its bonds on Monday, according to data-as-a-service company BondCliQ Media Services.

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