Fitch affirms Nestle

Fitch Ratings said it affirmed Nestle SA's long-term issuer default rating and senior notes at AA+ and short-term issuer default rating at F1+. The outlook is stable.

Fitch also affirmed the AA+ rating of the guaranteed senior notes and F1+ rating of the guaranteed commercial paper of Nestle Holdings, Inc. (USA) and Nestle Finance International Ltd.

The guaranteed commercial paper of Nestle Australia Ltd., Nestle Capital Corp. (USA) and Nestle Holdings (UK) plc were affirmed at F1+.

Given Nestle's consistent financial and operating performance over the past 10 years, the key factor continues to be management's financial policy and, in particular, the pace of share repurchases and acquisitions relative to free cash flow and divestitures, the agency said.

The rating is underpinned by the below-average risk of the packaged food industry relative to other sectors, the agency added. The recent spike in commodity prices is an area to monitor, especially in relation to subdued demand and pricing environment in developed markets, critically in certain European countries and North America.

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