AmBev Eyes A Grade

Moody’s has placed AmBev’s Baa1 ratings on review for possible upgrade, introducing the possibility of a low single A rating. The review is prompted by AmBev’s resilient operating performance and prudent financial policies during the global economic crisis, combined with an overall improvement in several sovereigns where AmBev operates. Credit metrics also improved throughout 2009, the agency says. The review also reflects a recent change in outlook to positive from stable of AmBev’s 74% owner, Anheuser-Busch InBev’s (ABI) Baa2 rating, reflecting ABI’s solid execution of the company’s de-leveraging plan so far, which included the numerous asset divestitures, and improved liquidity profile. Throughout FY 2009 in light of the difficult global liquidity environment, AmBev essentially paid off all of its near-term debt maturities as they came due and reduced total adjusted debt by 31.3% to 7.6bn at the end of 2009 from BRL11bn at end-2008. Meanwhile, its cash balance increased by 27.5% to BRL4.1bn in 2009. AmBev is the largest brewer in LatAm.