Fitch Upgrades Chile’s Embonor

Fitch has upgraded the international foreign and local currency issuer default ratings of Chilean bottler Coca-Cola Embonor to BBB from BBB minus, citing continuous improvement in credit metrics during the last five years, as well as its strong business position in Chile and Bolivia. Fitch believes that Embonor’s parent Coca-Cola, which owns 45% in the Chilean bottler, would financially support the company, if needed, to preserve its reputation for supporting bottlers in which it has a significant economic stake. Embonor’s net debt to Ebitda ratio has improved to 1.7x in June 2008 from 4.8x in December 2003, Fitch says. “The improvement is a result of increasing Ebitda levels due to higher sales volume, cost reductions and debt repayments,” it adds. The agency also notes a slight decrease in Embonor’s margins due to cost increases driven by higher concentrate costs and energy costs and political and social risks in Bolivia.