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Bond Market News
Kraft Heinz Said to Consider Splitting its Divisions with Uncertainty on Bond Allocations
July 16, 2025
Kraft Heinz is reportedly considering separating its slower-growing grocery brands from its faster-growing sauces division. This possible restructuring is still in the planning stage, with some bond investors talking about reassessing their positions after weighing the risk of some bonds being left with lower-margin businesses. Analysts anticipate that if a split occurs, Kraft Heinz may try to maintain its IG credit ratings (currently rated BBB) for both entities by reducing debt, possibly through tender offers.
However, uncertainty remains over how the bonds will be allocated post-split, how credit agencies will respond, and what the capital structures of the two new companies might be. Some analysts note that its bonds could rally if the company plans to buy them back to cut its debt load before the split. The company has over $21bn in long-term debt and is known to be facing challenges like inflation, changing consumer preferences and six consecutive quarters of declining revenues. While it has acknowledged exploring strategic moves to unlock shareholder value, it did not confirmed any specific plans.
Kraft Heinz’s bonds were weaker across the board. Its 5% 2035s were down 0.7 points to 96.2, yielding 5.5%.
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