Fitch rates Embotelladora Andina notes BBB+

Fitch Ratings said it assigned a BBB+ rating to the proposed senior unsecured notes to be issued by Embotelladora Andina SA. Proceeds, which are expected to total $300 million, will be used for general corporate purposes. Fitch currently rates Andina’s long-term foreign currency and local currency issuer default ratings BBB+. The outlook is stable.

Andina’s rating reflects the company’s resilient operating performance and low leverage despite the challenging macroeconomic environment in some countries where it operates, notably Brazil and Argentina. The rating also factors in Andina’s solid business profile due to its strong Coca-Cola brand as well as the relatively stable consumer dynamics of the beverage industry, Fitch said.

Fitch expects credit metrics to remain stable and free cash flow to be positive considering there are no major investments planned. The company is growing in the returnable segment and is focusing on operating efficiencies in production and logistics.

Fitch said it expects Andina’s net leverage to remain close to 1.5x over the next two years, including the effect of the cross-currency swaps. The company does not have any major capex projects for the following years.

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