Moody’s Ratings and S&P Global Ratings may cut Mars Inc.’s credit grades after the candy maker agreed to buy Kellanova for about $36 billion, including debt.

Mars’ A1 unsecured ratings were placed under review for a downgrade, while S&P could lower its issuer credit rating from A+. The acquisition, the biggest this year, was announced on Wednesday.

Mars inked a $29 billion bridge loan to finance the purchase in what is set to be the biggest blue-chip debt financing for a merger and acquisition in nearly a year, according to data compiled by Bloomberg. Much of that loan will be replaced with long-term debt.

The deal is expected to be financed largely with debt and will increase Mars’ gross debt to Ebitda ratio to a 4x range from a low 2x range, Moody’s analysts wrote in an Aug. 15 statement. Mars could be downgraded if operating performance weakens or if the company pursues more large debt funded acquisitions, according to the statement.

S&P said it estimates pro forma leverage could increase up to the low-4x area, assuming a fully debt-financed transaction without factoring in integration costs or synergy benefits. It said any downgrade could be limited to one notch based on available information, and it expects Mars to prioritize debt reduction over additional acquisitions after this deal.

Fitch Ratings placed Kellanova on watch for an upgrade, citing its “attractive” snacking portfolio, the company said Thursday.

Mars’ acquisition “would be the largest packaged-food deal in nearly a decade and could spur more M&A in the sector,” wrote Bloomberg Intelligence analyst Jennifer Bartashus.

  - Bloomberg