Compania Cervecerias Unidas S.A. (CCU)

Overview Key strengths Key risks Strong brand recognition and market share as one of the leading breweries in Chile and Argentina Exposure to commodity prices pressures its cost structure. Licensing, distribution, and joint ventures with major beverage companies. Geographic concentration in Chile (about 77% of revenues) and product concentration in beer (close to 50% of EBITDA). Record of net leverage below 1.0x and stable credit metrics. Exposure to risky economies, particularly to Argentina, which represents 10%-15% of EBITDA. 10-year senior unsecured notes won't increase leverage notably. We expect Compania Cervecerias Unidas S.A. (CCU) to use the proceeds mainly to bolster liquidity and/or to fund capital expenditures (capex), but net leverage shouldn't increase significantly. The new notes will rank pari passu

...Proposed 10-year senior unsecured notes won't increase leverage notably. We expect Compania Cervecerias Unidas S.A. (CCU) to use the proceeds mainly to bolster liquidity and/or to fund capital expenditures (capex), but net leverage shouldn't increase significantly. The new notes will rank pari passu with all of the company's other senior unsecured debt. CCU has a conservative financial policy. The company has a track record of net leverage below 1.0x and stable credit metrics. We believe CCU will keep its leverage and credit metrics in line with our expectations for the rating, with debt to EBITDA below 1.5x and funds from operations (FFO) to debt above 60% in the next 12-24 months....

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