In May 2017 we looked at the proposed merger between Kraft-Heinz and Unilever, where we discussed the differing approaches to business taken by the two entities. Then, in May 2019, we looked at Kraft-Heinz again as it was under investigation by the SEC because of its accounting situation. More recently however, the company has continued to struggle and now it is the turn of the credit rating agencies to weigh-in and affect the situation for the struggling firm. It was reported last week that, on the basis of Kraft-Heinz’s decision to maintain its dividend payouts to its shareholders despite an ever-growing debt burden, both S&P and Fitch would be downgrading the company to junk status i.e. non-investment grade. S&P cited the ‘unwillingness’ to change course on the dividend decision as a key factor in the downgrade decision, although the company has countered by declaring that ‘we believe it’s important to shareholders to maintain our dividend during this time of tra...

Yesterday, Turkish President Recep Erdoğan, continued his war of words with the Big Three credit rating agencies, asking for the justification for their recent downgrade of Turkish debt – ultimately stating that ‘the constitutional referendum in Turkey is none of your business. Who are you?’; this was in relation to Fitch Rating’s announcement that downgrading Turkey’s credit rating to BB+ was because of recent political and security events in Turkey which have ‘ undermined economic performance and institutional independence ’. In this post, there will be two questions asked: firstly, is President Erdoğan right to attack the rating agencies for such assessments, and secondly whether the issue of private entities having such an influence over the direction of a given society is something that should be promoted or rallied against? The balance between providing information for investors on one hand, and becoming involved, and in effect dictating the fortunes of a sovereign state is o...