French food giant Danone said this afternoon (7 November) that its financial position is "sound" after credit rating agency Moody's revised its outlook to negative.

Moody's warned that it anticipates both debt reduction and credit metric improvements to take longer than originally planned.

However, Danone was quick to refute this suggestion, reiterating that it remains "solidly on track to achieve the debt reduction and credit metrics improvements within the time frame that was agreed upon with Credit Rating Agent Moody's in November 2007."

Danone said that its own projections had actually "improved" since the company's last meeting with Moody's in June 2008.

The company said that it has sufficient sources of financing available to back up its EUR1.9bn (US$2.43bn) of commercial paper and to cover outstanding put options which amount to EUR2.7bn.

These sources consist of EUR3.bn of committed, undrawn credit back-up lines, EUR600m of cash and EUR500m of treasury shares, the company said.

The group added its next significant debt repayment totals EUR2.3bn and is due in December 2010.