Kraft Heinz Co. is the third-largest food and beverage company in North America.

NEW YORK — Expectations that Kraft Heinz Co. will achieve at least $1.5 billion in annual cost cuts, major working capital savings and $2 billion in debt reduction over the next 18 months have helped elevate the credit ratings of Moody’s Investor Services.

Moody’s has issued a Baa3 rating to $5 billion of senior unsecured notes being offered by Kraft Heinz in separate 10-year and 30-year tranches. Proceeds will be used primarily to call a portion of the company’s $8 billion 9% preferred stock, callable June 6, 2016. The rating of the outlook is stable.

Moody’s describes Baa ratings as “medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.”

The expected cost and debt reductions help counterbalance what Moody’s called “currently high financial leverage,” at just under 5 times debt to EBITDA at the end of 2015.

The redemption of the high coupon preferred stock will generate $450 million to $500 million in yearly savings, the ratings agency said.

The Moody’s rating outlook is stable.

Kraft Heinz Co. is the third-largest food and beverage company in North America and the fifth-largest food and beverage company in the world, with eight $1 billion-plus brands. The company’s iconic brands include Kraft, Heinz, Plasmon, Capri Sun, Classico, Jell-O, Kool-Aid, Maxwell House, Ore-Ida, Oscar Mayer, Philadelphia, Planters, Plasmon, Quero, and Velveeta. Annual sales are approximately $28 billion.

The company was formed in July 2015 through the merger of Kraft Foods Group into The H.J. Heinz Co. The Kraft Heinz Co. is controlled by 3G Capital (which holds a 23.8% stake) and Berkshire Hathaway (26.4%).