Credit ratings agency Fitch Ratings has changed its Rating Watch on Cadbury Schweppes long-term issuer default and senior unsecured ratings of 'BBB' to positive from negative, following the company's confirmation that it plans to separate its confectionery and drinks businesses, with the sale of the drinks business the most likely option.

Fitch also affirmed the company's short-term issuer default rating of 'F2' as well as taking it off the watch negative.

Fitch said this announcement amends the version issued on 19 June to include the removal of rating watch negative on the short-term issuer default rating. It said that this announcement "should dispel the risk of increased leverage and uncertainties about the surviving entity, which had caused Cadbury to be placed on negative watch in March 2007".

Fitch added that the Rating Watch Positive is expected to be resolved once the disposal is concluded, the target de-leveraging has occurred and the expected profit margin improvement from further restructuring is being achieved. "The ratings of CS could remain unchanged or be upgraded by a notch," the company said.