Nestle says commercial paper demand still strong

VEVEY, Switzerland, Oct 23 (Reuters) - Nestle (NESN.VX) on Thursday brushed off concerns that the global credit crisis could strain its financing, saying demand for its commercial paper has remained resilient in harsh times for world markets.

Roddy Child-Villiers, head of investor relations for the world's largest food group, said Nestle's predictable cash flows and solid balance sheet made it "the gold standard" in the industry.

"Whatever the environment is in the debt markets, we are fantastically positioned to benefit from a flight to quality, or as you have seen in an easier time, from our strong balance sheet," Child-Villiers told analysts on a conference call.

"Nestle's debt has been more short-term than long-term rated because this has been the most cost-effective strategy," he said after Nestle posted strong 9-month results. [ID:nLM110369]

"We have seen continued demand for our commercial paper in September and October and we continue to place it at sub-LIBOR levels."

Child-Villiers declined to give precise guidance on Nestle's financing costs in the next year. "It is a risky number to try to forecast," he said.

Nestle, whose top brands include Nescafe, Movenpick, KitKat, Buitoni and Jenny Craig, said earlier on Thursday it had used $10.4 billion from selling its stake in eyecare firm Alcon to cut its exposure to the short-term commercial paper market.

It said net debt would be lower at the end of 2008 than at the end of 2007, when it stood at 21.2 billion Swiss francs.

"Nestle enjoys predictable cash flows which, combined with its high credit quality, have positioned it well in recent market conditions, enabling it to continue to make below-market rate debt offerings," it said. (Reporting by Laura MacInnis; Editing by Paul Bolding)