The ratings on Coca-Cola Femsa S.A.B. de C.V. (KOF) reflect the company's satisfactory business profile, The Coca-Cola Co.'s (KO; A+/Stable/A-1) implicit support through its 31.6% stake in KOF, and the strategic position that KOF holds in the Coke system in Latin America. In addition, the ratings incorporate the company's debt reduction after acquiring Panamerican Beverages Inc. in May 2003. The ratings also reflect Standard&Poor's Ratings Services' expectation that KOF will maintain its strong financial profile through robust cash flow generation in its core markets. These factors are offset partially by a highly competitive environment, market volatility, and foreign currency exposure related to its dollar-denominated debt, which represented about 41% of total debt outstanding as of March 31, 2008.
