U.S.-based ConAgra Foods Inc. is acquiring Ralcorp Holdings Inc. (BBB-/Negative/--) for roughly $6.8 billion, including the assumption of approximately $1.9 billion in debt. ConAgra intends to fund the acquisition and repayment of some of Ralcorp's existing debt with cash on hand, borrowings under its existing credit facilities, new long-term debt, and equity. We understand that ConAgra has a commitment for a $4.5 billion senior unsecured bridge facility and $1.5 billion senior unsecured term loan. The company recently announced its debt plans for the majority of Ralcorp's debt and we have conducted our structural subordination review of both companies' issue-level ratings. We are lowering all the ratings, including our corporate credit rating, on ConAgra Foods Inc. one notch to 'BBB-' from
