Cott Corp. is proposing to sell its traditional low-margin carbonated soft drink and juice businesses to Refresco Group NV for US$1.25 billion, using the proceeds to pay down debt and add cash to the balance sheet. We expect the proposed transaction to improve Cott's EBITDA margins and credit metrics. As a result, we are revising our outlook to positive from stable and affirming our 'B' long-term corporate credit rating on the company. We are also affirming the 'BB-' issue-level rating on Cott's US$350 million senior secured notes, based on the unchanged '1' recovery rating. As well, we are raising our issue-level on the senior unsecured notes to 'B' from 'B-', and revising our recovery rating on the notes to '4'
