Fitch upgrades AmBev

Fitch Ratings said it upgraded the senior unsecured foreign currency debt rating of Companhia de Bebidas Das Americas (AmBev) to BBB- from BB+. The company's BBB local currency rating and the BBB ratings of AmBev's political-risk-insured notes due in 2011 and 2013 have been affirmed.

The outlook is stable.

Fitch said the upgrade is a result of the recent restructuring of the debt at the company's Canadian subsidiary, which allows it to more easily meet the dollar obligations of its Brazilian operations with cash flow generated in hard currencies. To a lesser extent, the upgrade also incorporates the improving financial and political situation in Brazil.

At the end of September, AmBev had R$7.1 billion of debt and R$1.1 billion of cash and marketable securities, the agency said. These figures translate into a total debt to EBITDA ratio of 1.2x and a net debt to EBITDA ratio of 1.0x. About 29% of AmBev's consolidated debt is located at Labatt.

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