DBRS confirms PepsiCo

DBRS said it confirmed PepsiCo, Inc.'s A (high) senior debt and R-1 (low) commercial paper ratings.

The trend is stable.

PepsiCo will purchase 66% of Russia's Wimm-Bill Dann Dairy and Juice Co.'s issued shares for $3.8 billion. It plans to fund 75% of the cost with cash and the remainder with commercial paper. On a pro forma basis, DBRS expects the company's debt-to-EBITDA ratio to increase to 2.2 times, which is within the current rating range.

DBRS said the acquisition will increase PepsiCo's scale, brand portfolio and system capabilities within Russia, with the potential to expand its platform across Eastern and Central Europe. The agency considers integration risk to be low because PepsiCo has a significant presence and has substantial prior integration experience in Russia.

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