TEXT-Fitch: Coca Cola Femsa ratings unaffectected by Grupo Yoli deal

Tue Jan 22, 2013 10:59am EST

Jan 22 - Fitch Ratings believes that the agreement reached by Coca Cola
Femsa, S.A.B. de C.V. (KOF) and Grupo Yoli, S.A. de C.V. (Grupo Yoli)
to merge their bottling operations does not have any material impact on the
credit quality of KOF.

The all share transaction was valued at MXN8.8 billion. The shareholders of
Grupo Yoli will receive around 42.4 million of new KOF's shares (series L) at a
value of MXN184 per share. The consolidation of Grupo Yoli will add to KOF's
balance sheet a net debt of approximately MXN1 billion.

Grupo Yoli operates mainly in the states of Guerrero and Oaxaca which includes
the territories of Acapulco and Ixtapa Zihuatanejo. The company has two bottling
plants and 20 distribution centers. Grupo Yoli had a sales volume of around 99
million units cases in 2012 that generated net revenues and EBITDA of
approximately MXN4 billion and MXN814 million, respectively.

KOF's ratings are supported by the company's substantial free cash flow
generation, solid financial position, ample financial flexibility and strong
business profile. The company's foreign currency Issuer Default Rating (IDR) is
higher than the 'A-' country ceiling of Mexico, where the company is domiciled.
Transfer and convertibility risks are mitigated by KOF's strategic relationship
with The Coca-Cola Company (KO, rated 'A+'/Stable) and the explicit and implicit
financial support KOF has received from KO; in addition, the ratings consider
the geographical diversification of the EBITDA generated outside Mexico, as well
as its strong credit profile.

Fitch currently rates KOF as follows

--Foreign Currency IDR 'A';
--Local Currency IDR 'A';
--National Scale Long Term Rating 'AAA(mex)';
--National Scale Short Term Rating 'F1+(mex)';
--Senior Notes for USD500 million 'A'.

The Rating Outlook is Stable.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:
--'Corporate Rating Methodology', Aug. 8, 2012.

Applicable Criteria and Related Research:
Corporate Rating Methodology
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