Research Update: Coca-Cola Femsa 'BBB+' Global And 'mxAAA' National Scale Ratings Affirmed; Global Scale Rating Outlook Still Negative

With about 3.3 billion cases sold and MXN183.6 billion in revenues in 2020, Coca-Cola Femsa S.A.B. de C.V. (KOF) remains the largest franchise Coca-Cola bottler worldwide and a strategic partner for The Coca-Cola Co. (A+/Negative/A-1). We expect KOF's revenues to gradually recover to pre-pandemic levels by year-end 2021 and expect its adjusted leverage to be 1.0x-1.5x in the next two years, consistent with our 'a-' stand-alone credit profile (SACP) on the company. KOF's stronger liquidity position, limited debt maturities over the next few years, and expected solid cash flow prompted us to revise our liquidity assessment to strong from adequate. On April 21, 2021, S&P Global Ratings affirmed its long-term 'BBB+' global scale and 'mxAAA' national scale issuer credit and

...- With about 3.3 billion cases sold and MXN183.6 billion in revenues in 2020, Coca-Cola Femsa S.A.B. de C.V. (KOF) remains the largest franchise Coca-Cola bottler worldwide and a strategic partner for The Coca-Cola Co. (A+/Negative/A-1). - We expect KOF's revenues to gradually recover to pre-pandemic levels by year-end 2021 and expect its adjusted leverage to be 1.0x-1.5x in the next two years, consistent with our 'a-' stand-alone credit profile (SACP) on the company. - KOF's stronger liquidity position, limited debt maturities over the next few years, and expected solid cash flow prompted us to revise our liquidity assessment to strong from adequate. - On April 21, 2021, S&P Global Ratings affirmed its long-term '###+' global scale and 'mxAAA' national scale issuer credit and debt ratings on KOF. We cap the global scale ratings two notches above its weighted average sovereign ceiling. - The negative outlook on the global scale rating still reflects a potential one-notch downgrade if we...

Research Update