Moody's rates Cott notes B3

Moody's Investors Service said it assigned a B3 rating (LGD5, 70%) to the new $525 million senior notes to be issued by Cott Beverages, Inc., a subsidiary of Cott Corp. The company's B2 corporate family rating, other ratings and stable outlook are unchanged.

Proceeds will be used for the repayment of Cott's $375 million 8 1/8% senior notes due 2018 and for general corporate purposes including the acquisition of Aimia Foods (Holdings) Ltd.

The agency said Cott's B2 corporate family rating reflects its moderate leverage, positive free cash flow, good liquidity and leadership position as the largest private-label beverage producer in North American with a broad portfolio of beverages.

In Moody’s view, these positives are offset by the company's limited market share, presence in an industry dominated by Coca-Cola and PepsiCo, customer concentration and volatility in operating performance due to significant commodity exposure and vulnerability to pricing decisions of branded industry players and retailers.

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