Fitch Rates Kimberly-Clark's $300MM Note 'A'

Fitch Ratings assigns an 'A' rating to Kimberly-Clark Corp.'s (Kimberly) new $300 million, 10-year senior unsecured note. The proceeds will partially refinance the 5.625%, $400 million note due on Feb. 15, 2012.

Fitch affirmed Kimberly's 'A' Issuer Default Rating (IDR) on Oct. 6, 2011. The Rating Outlook is Stable.

The ratings reflect the company's ability to consistently generate at least $2.3 billion in operating cash flow and over $500 million of free cash flow annually. However, the company made $679 million in pension contributions, which was an incremental $435 million over the 2010 level. This contributed to free cash flow declining to $221 million. Kimberly stated that contributions in 2012 will be materially less at $50 to $100 million. As a result, free cash flow should return to historical levels in the near term. Additionally, Kimberly has significant scale with over $20 billion in revenues and leading market shares in a relatively non-cyclical personal products and household care products industry.

For the year ended Dec. 31, 2011 revenues increased 6% to $20.8 billion led by F/X translation of 3%, pricing of 2% and volume of 1%. Operating profit (excluding other income and restructuring charges) declined modestly by 3% to $2.8 billion as sales growth and cost savings were not enough to fully offset inflation in key input costs.

Kimberly has more than $2.7 billion in liquidity with $764 million in cash and $2 billion in revolving credit commitments ($500 million, 364-day maturing Oct. 12, 2012 and $1.5 billion, five-year maturing Oct. 13, 2016). At Dec. 31, 2011 leverage (EBITDA to total debt) was approximately 1.7x and debt balances (including redeemable preferred securities of subsidiaries) was $6.7 billion. Both were within Fitch's expectations. Debt is anticipated to remain in the $7 billion range during the medium term. Debt maturities are modest in 2012 and 2013 when a 5.625%, $400 million note and a 5%, $500 million note are due, respectively. The $400 million note is being partially refinanced with this new issuance. The company will also need to remarket $200 million in dealer remarketable securities each December.

Fitch currently rates Kimberly as follows:

--Long-term IDR 'A';

--Short-term IDR 'F1';

--Commercial paper (CP) 'F1';

--$200 million dealer remarketable securities 'A' and 'F1';

--$2 billion revolving credit facilities 'A';

--Senior unsecured notes and debentures 'A'.

Fitch also has a CP rating on Kimberly-Clark Worldwide, Inc. of 'F1'. CP issued by Kimberly-Clark Worldwide, Inc., is fully guaranteed by KMB.

Additional information is available at 'www.fitchratings.com'. The ratings above were unsolicited and have been provided by Fitch as a service to investors.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' Aug. 12, 2011;

--'Fitch Affirms Kimberly-Clark's IDR at 'A'; Outlook Stable' Oct. 7, 2011;

--'Fitch Rates Kimberly-Clark's New Bank Facilities 'A' Oct. 17, 2011.

Applicable Criteria and Related Research:

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229

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