Moody’s raises SABMiller, Foster’s to A3

Moody's Investor Service said it upgraded the long-term senior unsecured rating of SABMiller plc and the issuer rating of Foster's Group Pty. Ltd. to A3 from Baa1.

The ratings of their medium-term note program and the senior unsecured ratings of their respective guaranteed subsidiaries were also upgraded to provisional A3 and A3, respectively.

Concurrently, the agency affirmed SABMiller’s and its guaranteed subsidiaries’ P-2 short-term ratings, and the national scale ratings of Aa3.za/P-1.za assigned to Sabsa Holdings Ltd.

The outlook is stable.

"SABMiller's upgrade reflects the strong improvements in the group's credit metrics during the financial year ending March 2015 and our belief that this improvement will be sustainable over the medium to long term, despite the company's ongoing appetite for potential medium to large size acquisitions," Paolo Leschiutta, Moody's vice president, senior credit officer and lead analyst for SABMiller, said in a news release.

"During the financial year ending March 2015, the company reduced its gross reported financial debt by 26%, more than compensating for the negative impact of adverse currency movements on reported profitability (reported EBITA was down 1%). On a preliminary basis, SABMiller's financial leverage (debt to EBITDA) and retained cash flow (RCF) to net debt (both Moody's adjusted) stood respectively at 1.9x and at 28.5%, well within the guidance we set for an upgrade when we changed the outlook to positive in October last year."

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