both Fitch and S&P have lowered their ratings on CAG to junkj--or near junk status. both acted after Cag said it would use debt to finance purchase of ralcorp. S&P said it may take several years for CAG to recover its BBB rating. investors tend to shy away from companies with low credit ratings--and it increases borrowing costs for such companies. surely the brass hats at CAG expected the reaction --and were not deterred from the pursuit of Ralcorp.
hope you're right...the divvy is attractive. surprised Cag has gone for so many acquisitions past 2 years--kinda like the days of mike harper. seems they're been pretty successful. the Ralcorp buy was a more than $6 billion strike---where will Cag go after it's effective??