Fitch downgrades Embotelladora Andina

Fitch Ratings said it downgraded and removed from Rating Watch negative Embotelladora Andina's long-term local- and foreign-currency issuer default ratings to A- from A, along with the rating on its senior unsecured notes due in 2027 to A- from A.

The agency also lowered the company's long-term national scale rating to AA(cl) from AA+(cl) and its senior unsecured notes to AA(cl) from AA+(cl).

Fitch also affirmed Andina's equity rating at nivel 2(cl).

The downgrades follow Andina's purchase of Companhia de Bebidas Ipiranga for about R$1.2 billion in the middle of September.

The acquisition increases Andina's net leverage to about 2x on a pro forma basis, Fitch said. This degree of leverage is materially higher than the 0.12x average net debt-to-EBITDA ratio maintained by the company from 2008 to 2012, the agency said.

The downgrades also consider Andina's more aggressive approach to inorganic growth recently, Fitch said.

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