S&P gives AA- to Coca-Cola notes

S&P said it assigned its AA- issue-level rating to Coca-Cola Co.'s proposed senior unsecured Australian dollar notes; final amounts and maturities to be determined.

The company intends to use the net proceeds for general corporate purposes.

Coca-Cola benefits from its very strong position as the world's largest nonalcoholic beverage company, anchored by well-known brands, above-average EBITDA margin, as well as broad geographic diversification, including an extensive global bottling network, the agency said.

S&P forecasts Coca-Cola’s leverage will be modestly higher over next several quarters and then improve once it completes refranchising its bottling operations.

The agency estimates debt to EBITDA was about 2.5 times for the 12 months ended March 31, where it anticipates it will remain for several quarters before declining to near 2 times and possibly lower by fiscal 2017.

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