Research Update: Cott Corp. Outlook Revised To Stable From Positive On Potential For Acquisitions; 'B' Rating Affirmed

We expect Cott Corp.'s leverage will remain in the high 4-x area through 2019, above our previous low-4x expectation. If credit metrics were to improve, we would expect Cott to redeploy capital toward larger debt-funded acquisitions that could bring leverage back up toward 5x. As a result, we are revising our outlook on Cott to stable from positive because we no longer expect the company to sustain leverage below 4.5x in the next 12 months. At the same time, we are affirming all our ratings on Cott, including our 'B' long-term issuer credit rating. The stable outlook reflects our expectation that the company will maintain adjusted debt-to-EBITDA in mid-to-high 4x area and EBITDA interest coverage above 3x and also reflects

...+ We expect Cott Corp.'s leverage will remain in the high 4-x area through 2019, above our previous low-4x expectation. If credit metrics were to improve, we would expect Cott to redeploy capital toward larger debt-funded acquisitions that could bring leverage back up toward 5x. + As a result, we are revising our outlook on Cott to stable from positive because we no longer expect the company to sustain leverage below 4.5x in the next 12 months. + At the same time, we are affirming all our ratings on Cott, including our 'B' long-term issuer credit rating. + The stable outlook reflects our expectation that the company will maintain adjusted debt-to-EBITDA in mid-to-high 4x area and EBITDA interest coverage above 3x and also reflects the possibility of leverage increasing up to 6x temporarily due to debt-funded acquisitions....

Research Update