Coca-Cola Outlook Revised To Negative On Slower Debt Reduction; 'AA-/A-1+' Ratings Affirmed

We have updated our forecasts for The Coca-Cola Co. after receiving an update on the company's fiscal 2016 earnings and on its bottler refranchising implementation, which will likely be largely completed by year-end 2017. We do not expect the company's leverage will reduce by as much as we previously anticipated, partly because the timing of the company's pending acquisition of Coca-Cola Beverages Africa will preclude any debt reduction this year, while foreign currency effects and lower cash generation will likely hamper future debt reduction. As a result, we see a risk that the company's credit metrics may not improve and it will be unable to sustain debt to EBITDA closer to 2x upon completion of its bottler refranchising. We are

...+ We have updated our forecasts for The Coca-Cola Co. after receiving an update on the company's fiscal 2016 earnings and on its bottler refranchising implementation, which will likely be largely completed by year-end 2017. + We do not expect the company's leverage will reduce by as much as we previously anticipated, partly because the timing of the company's pending acquisition of Coca-Cola Beverages Africa will preclude any debt reduction this year, while foreign currency effects and lower cash generation will likely hamper future debt reduction. + As a result, we see a risk that the company's credit metrics may not improve and it will be unable to sustain debt to EBITDA closer to 2x upon completion of its bottler refranchising. + We are therefore revising our outlook on Coca-Cola to negative from stable and affirming all our ratings on the company, including the '##-/A-1+' corporate credit ratings. + The negative outlook reflects the risk that the company may not sufficiently reduce...

Ratings Action