Moody’s changes Coca-Cola view

Moody’s Investors Service said it affirmed the Aa3 senior unsecured long term and Prime-1 short term ratings of Coca-Cola Co. and changed the outlook to negative from stable.

The agency said the affirmation reflects the company's strong beverage franchise and good operating momentum, evidenced by growing organic revenues and profits. The negative outlook reflects high gross leverage for the Coca-Cola system, Moody’s said.

The agency said it estimates that system debt to EBITDA was 3.6 times at the end of 2017. Net debt to EBIDTA was around 2.5 times.

“Coca-Cola Company's credit profile reflects the system's leading position in the global carbonated soft drink (CSD) industry, including its ownership of one of the most valuable consumer brands in the world,” Moody’s said in a news release.

“It also reflects a highly-diverse global operating network, a strong and growing non-carbonated portfolio, and unrivaled distribution.

“These strong qualitative factors are tempered by the system's high gross leverage.”

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