TEXT-S&P: AmBev ratings unaffected by CND acquisition

Mon Apr 16, 2012 3:10pm EDT

April 16 - Standard & Poor's Ratings Services said today that its ratings on AmBev - Companhia de Bebidas das Americas (A-/Stable/--) are unaffected by its announcement that it has agreed to acquire the control of Cerveceria Nacional Dominicana S.A. (CND; B/Positive/--). In our view, the acquisition will provide AmBev with a more geographically diversified business profile through CND's strong position in the Caribbean beverage market while not eroding AmBev's modest financial profile. AmBev is to pay $1.27 billion in cash for the control of CND, and it will consolidate CND's financial statements with its own. This cash outflow won't affect our assessment of AmBev's strong liquidity. The company was a net creditor as of Dec. 31, 2011, with cash on hand of Brazilian reais (R$) 8.3 billion, short-term maturities of R$2.2 billion, and total debt of R$4.1 billion. We expect it will continue to report very low leverage, with debt to EBITDA close to 0.5x and funds from operations to debt in excess of 100% even after the consolidation of the acquired assets.

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