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CONSUMER STAPLES: General Mills (Baa2/BBB) S&P comments on yoghurt business sale

CONSUMER STAPLES

S&P has no issue with $2.1b in sale proceeds going straight to buybacks adding "the highly competitive yogurt business had been a drag on the company’s revenue growth and profit margins for several years." S&P has pro-forma leverage moving to its adj. low 3's (company reported net 3x at the end of May). As we said yesterday it has leverage headroom to ratings but we are still interesting in earnings on Wednesday given falling sales recently and weak guidance.

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