Fitch Turns Negative on Bepensa

Fitch has cut the rating outlook for Mexican Coca-Cola bottler Bepensa to negative from stable, but affirms its BBB foreign and local currency issuer default ratings. The revised outlook is a result of concerns about the declining economic environment in Mexico and the potential negative impact it could have on Bepensa’s subsidiary Financiera Bepensa during 2009. “While Financiera Bepensa has been quite profitable, it represents additional exposure of the company away from its core business, selling soft drinks, juices and water,” the ratings agency says. Bepensa’s financial leverage, as measured by total debt-to-Ebitda, was 1.7x as of September 30, says Fitch. This compares to 1.4x in December 2006. “The portion of this debt that has been with Financiera Bepensa has been increasing, however, as it has grown by about 110% between June 2007 and December 2008. Bepensa’s liquidity remains manageable. The ratio of cash to short-term debt was 0.7x at the end of September 2008,” adds the agency.