The ratings on Coca-Cola FEMSA S.A. de C.V. (KOF) reflect the company's dominant soft-drink market share in its franchise territories in Mexico and Argentina, relative cash flow diversification, favorable industry fundamentals in both countries, Coca-Cola Co.'s (KO) 30%-equity participation in KOF, and the company's strategic importance to the Coke system in Latin America. These factors are partially offset by a high competitive environment, Coca-Cola FEMSA's moderately aggressive financial profile and foreign currency exposure related to its dollar-denominated debt. Coca-Cola FEMSA is the largest soft-drink bottler in Mexico and Argentina, and it represents approximately 13% of total KO's volume in Latin American and 25% of total Mexican volume. The company's franchised territories include the Valley of Mexico and the southeast region
