Nestlé has announced a change in its targeted capital structure that will be carried out through a CHF20 billion share buyback to be completed by June 2020. We consider this to be a shift in financial policy that has negative credit implications. In our view, this move signals a deviation from the company's strong commitment to a solid 'AA' rating, and we expect the S&P Global Ratings-adjusted debt-to-EBITDA ratio will increase to about 2x as a result of higher debt when the share buyback plan is completed. We see this as a permanent increase in leverage. We are lowering our long-term rating on Nestlé to 'AA-' from 'AA' and affirming our 'A-1+' short-term rating. The stable outlook reflects our expectation
