Standard & Poor's Rating Services affirmed its ratings on Deerfield, Ill.-based Mondelez International Inc. (Nasdaq: MDLZ), including its 'BBB' long-term corporate credit rating and 'A-2' short-term corporate credit and commercial paper ratings. We have revised the outlook to negative from stable.

"The affirmation and negative outlook reflects our concerns that Mondelez's core credit ratios may weaken and be below our prior expectations for its 'significant' financial risk profile," said Standard & Poor's credit analyst Jean Stout. "This is based on our concerns that category growth has continued to slow, the ability of Mondelez to realize expected cost savings from the initiation of an expanded multiyear restructuring program, the contribution of its higher margin coffee business to a newly formed joint venture with D.E Master Blenders 1753 B.V. to be called Jacobs Douwe Egberts, as well its decision to apply a majority of the expected $5 billion in after-tax cash proceeds to fund share repurchases. We believe the remaining business will continue to have a 'strong' business risk profile, albeit somewhat weaker, because of a more narrow business focus, reduced scale and expected lower margin in the near-term."

Standard & Poor's could lower its rating on Mondelez if the company's core ratios do not remain within the indicative ratio ranges for a "significant" financial risk profile, including funds from operations (FFO) to debt in the 20%-30% range and leverage in the 3x–4x range. Although unlikely in the near-term, we could consider revising the outlook to stable if the company can improve and sustain its core credit measures comfortably within the indicative ratio ranges for a "significant" financial risk profile, including FFO to debt above 20% or more and leverage near 3.5x.