Moody’s downgrades Ambev to Baa3

Moody's Investors Service said it downgraded Ambev SA's issuer ratings to Baa3 (global scale foreign currency and local currency) from Baa1 (global scale foreign currency) and A3 (global scale local currency).

At the same time, Moody's America Latina downgraded the global scale rating of the R$1 billion senior debentures due 2021 to Baa3 from A3 and confirmed the national scale rating of Aaa.br.

The outlook is negative.

The action was prompted by the downgrade of Brazil's issuer and bond ratings to Ba2 from Baa3.

This action concludes the review for downgrade initiated in December.

Ambev is rated above Brazil's issuer rating and above the country's foreign currency ceiling for bonds and notes of Ba1, which is granted only under exceptional circumstances when an issuer's fundamentals are stronger than those of the sovereign. In the case of Ambev, this is evidenced by its exceptionally strong credit metrics, ample liquidity, limited reliance on the local banking system for funding and meaningful cash generation outside Brazil, which is sufficient to service the company's foreign currency debt, Moody’s said.

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