Moody's rates PepsiCo bonds Aa2

Moody's Investors Service said it assigned an Aa2 rating to PepsiCo Inc.'s bond issuance.

The rating remains on review for downgrade pending final details concerning the purchase of its two largest bottlers, the agency said.

The review will consider the combined strength of the Pepsi System on a fully consolidated basis including additional debt, and PepsiCo's financial strategies and debt tolerance going forward, Moody's said.

The agency added that the ratings for PepsiCo have always considered the financial strength of the system as a whole, the additional debt involved in consolidating the system could result in a rating lower than the current PepsiCo rating level, noting that the company's Aa2 long-term rating reflects its strong brand franchises in snack foods and beverages, global reach, solid innovation pipelines, efficient operations, and extensive and multifaceted distribution network, as well as its continued solid financial performance on a system basis.

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