Billionaire Warren Buffett’s love of ketchup and hash browns
is transforming H.J. Heinz into the most-leveraged food maker in
America, Bloomberg tells.
Buffett’s Berkshire Hathaway Inc. (BRK/A) and 3G Capital
Inc.’s $23 billion acquisition of Heinz may double the company’s total debt to
five times earnings before interest, taxes, depreciation and amortization,
according to Fitch Ratings, the highest of any comparable food company. The
cost to protect Heinz’s debt from losses soared to a record after the
announcement.
While Buffett has used takeovers to build Berkshire into a
$249 billion company and burnish his reputation as the world’s most successful
investor, financing the deal with $14.1 billion in debt threatens to strip
Heinz of the investment-grade rating that it’s had for four decades. Fitch cut
Heinz to junk on Feb. 15 and credit-default swaps imply a Ba1 rating, according
to Moody’s Corp.’s capital markets research group. That’s two steps lower than
its Baa2 rating from Moody’s Investors Service and three below its BBB+ grade
from Standard & Poor’s…
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