Kraft Foods Inc. loses access to short-term credit

Recent actions by credit rating agencies have eliminated Kraft Foods Inc.'s current access to commercial paper, according to an April 4 news release by Kraft. Commercial paper short-term unsecured credit is rated by Standard & Poor's and Moody's.

Kraft has a plant in Springfield.

These credit rating agency actions were in conjunction with similar actions for Altria Group Inc., resulting from a bonding requirement on Philip Morris USA Inc. ordered by an Illinois state judge related to a tobacco class-action lawsuit. Kraft is not a party to, and has no exposure to, the litigation.

Kraft has begun borrowing against its revolving credit facilities. These borrowings will be used to meet Kraft's normal business needs, including the repayment of maturing commercial paper and funding of working capital needs.

While the use of the revolving credit facilities in lieu of commercial paper will result in higher overall borrowing costs, Kraft indicated that the impact is not expected to be significant to 2003 full-year results and reconfirmed its previously issued guidance of fully diluted earnings per share of $2.10-$2.15 in 2003.