Moody’s downgrades ThaiBev to Baa3

Moody's Investors Service said it downgraded Thai Beverage PCLs (ThaiBev) issuer rating to Baa3 from Baa2.

The action concludes the review for downgrade initiated in December following the company's announced acquisition of a 53.59% stake Saigon Beer Alcohol Beverage Corp. (Sabeco), the market leader in Vietnam's beer sector with an around 41% market share based on volumes.

The outlook is negative.

"The rating action reflects the significant increase in debt to fund a 53.59% stake in Sabeco we expect will drive ThaiBev's consolidated adjusted debt/EBITDA close to 4.8x at year-end September 2018, representing a significant shift in the company's financial risk appetite from our previous expectations of leverage remaining below 2x," Moody's vice president and senior credit officer Annalisa Di Chiara said in a news release.

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