Coca-Cola Femsa S.A.B. de C.V.

The negative outlook on KOF's global scale rating reflects a potential one-notch downgrade if we were to lower our sovereign rating on Mexico. This also captures the company's significant exposure to lower-rated countries, including Brazil. We could also lower the global scale rating on KOF in the next 12-24 months if the company's key credit metrics don't remain within levels in line with its existing financial risk profile, with debt to EBITDA consistently trending above 2.0x. This could occur if the company engages in an aggressive investment plan that requires additional debt, or if its EBITDA margins deteriorate in light of economic slump across Latin America, or if raw materials prices and exchange rate volatility increases. The stable outlook on

...KOF business strategy is evolving beyond its core products. KOF aims to become a total beverage leader with a global footprint. We believe KOF will continue to accelerate its revenue growth through the introduction of new categories, products, and presentations while maintaining its core products and maintaining its profitability. As of the end of 2018, close to 34.6% of its brands were low-or no-sugar beverages....

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