Industry News | March 23, 2006

Yum on Review for Credit Rating Upgrade

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Yum Brands Inc., whose corporate debt climbed out of junk status two years ago, on Thursday was put into position for another upgrade by a major rating agency, the Associated Press reports.

Moody's Investors Service, which currently rates Yum's $2.5 billion of corporate debt at a "Baa2," put the owner of Taco Bell, Pizza Hut and KFC on review for an upgrade. The rating agency cited the Louisville, Ky.-based company's ability to aggressively pursue a growth strategy while still maintaining fiscal strength.

"The review for possible upgrade reflects Moody's view that YUM's brand strength, geographic and brand diversification, and franchise focused business model should help to minimize the impact of regional weakness and provide a more stable revenue stream," Moody's analyst Tom Marshella said in a report.