Fitch rates PepsiCo notes A

Fitch Ratings said it assigned an A rating to PepsiCo, Inc.'s newly issued $750 million 0.95% senior notes due February 2017 and $1.25 billion 3.6% senior notes due March 2024.

PepsiCo has a long-term issuer default rating of A, senior unsecured debt rating of A, bank credit facilities rating of A, short-term issuer default rating of F1 and commercial-paper program rating of F1.

Pepsi-Cola Metropolitan Bottling Co., Inc. has a long-term issuer default rating of A and guaranteed senior notes rating of A.

Bottling Group, LLC has a long-term issuer default rating of A and guaranteed senior notes rating of A.

PepsiCo plans to use the net proceeds for general corporate purposes, including the repayment of commercial paper, Fitch said.

The outlook is stable.

The notes will be issued by PepsiCo, Inc. and will rank equally with PepsiCo's senior unsecured obligations, the agency said.

Significant covenants include limitations on secured debt and conditions related to consolidation, mergers or the sale of assets, Fitch said.

PepsiCo is not bound by any financial covenants. The notes are callable by PepsiCo subject to a make-whole provision, the agency said.

The ratings reflect the company's considerable financial flexibility, substantial cash flow, significant scale, product diversification, increasing exposure to faster growing emerging markets and position as the world's second largest food and beverage company, Fitch said.

PepsiCo's financial strategy, historically viewed as aggressive, also is factored into ratings, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.