Takeover debt risk cuts Kraft and Cadbury credit ratings

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Fitch said it downgraded the pair to BBB-, with analysts saying others would probably follow.

Although such moves were expected, they highlighted the additional risk for Kraft in carrying out such a huge purchase.

Credit ratings are crucial as they dictate how much companies are likely to have to pay in interest on their debts - lenders charge a higher percentage for those with worse credit scores.

Late last night, Moody's said Kraft's ratings were under review for a possible downgrade.

For its part, rival S&P kept its BBB rating on Cadbury under CreditWatch status - meaning it was on alert for possible changes.

Gordon Brown said he had assurances from Kraft that it would try to safeguard Cadbury workers and hoped the new owners could retain jobs.

Cadbury chairman Roger Carr, who had resisted the takeover until yesterday's increased offer of £11.9 billion, said he expected job losses at Cadbury's head office.

Cadbury's shares dropped 0.5p to 836.5p today.