The ratings for Coca-Cola FEMSA S.A. de C.V. (KOF) reflect the company's dominant soft-drink market share in its franchise territories in Mexico and Argentina, relative cash flow diversification, Coca-Cola Co.'s (KO) 30%-equity participation in KOF, and the company's strategic importance to the Coke system in Latin America. These factors are partially offset by a highly competitive environment, Coca-Cola FEMSA's moderately aggressive financial profile, and foreign-currency exposure related to its dollar-denominated debt. As the largest soft-drink bottler in Mexico and Argentina, KOF represents approximately 14% of KO's total volume in Latin American and 27% of total volume in Mexico. The company holds a dominant market share in its Mexican franchised territories, where it generated about 82% of its consolidated revenues in
