Moody's rates Dr. Pepper Snapple loans Baa3

Moody's Investors Service said it assigned a provisional Baa3 rating to the proposed $500 million senior unsecured revolving credit and $1.9 billion senior unsecured bank term facility in connection with forming the new company Dr. Pepper Snapple Group, Inc. out of a spinoff from Cadbury Schweppes.

The outlook is stable.

Proforma 2007 debt-to-EBITDA ratio is expected to be 3.1 times.

The Baa3 rating and stable outlook are based on the company's solid portfolio of brands, many with leadership positions in their subcategories, and strong profitability and diversity, the agency said.

The company's strengths are offset by initial leverage that is at the high end of the acceptable range for an investment grade company, dependence on non-controlled distribution for a large proportion of its product, difficult commodity cost environment and lack of track record as an independent company, Moody's said.

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