Moody's ups Pepsi Bottling, rates loans A2

Moody's Investors Service said it upgraded Pepsi Bottling Group's ratings to A2/Prime-1 and assigned an A2 rating to its $1.2 billion five-year senior unsecured bank facility due in October 2012.

The outlook is stable. This concludes the review for upgrade that began on Oct. 11.

Moody's said that while its view of the standalone credit profile has not changed, the upgrade represents a shift in the amount of support factored into the rating from the relationship with PepsiCo.

The standalone credit rating, which remains in the Baa range, is based on its large size, strong market position, solid innovation pipeline, efficient operations, relatively strong price and volume balance, modestly diversified product portfolio, somewhat limited geographic reach and modestly weak credit metrics, the agency said.

The issuer's liquidity profile is supported by its strong cash flow, ample backup for its short-term funding needs and its position as the largest bottler in the Pepsi System, Moody's said.

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