Moody’s: Prime-2 to Coca-Cola European short-term

Moody's Investors Service said it assigned a Prime-2 rating to Coca-Cola European Partners plc for short-term issuance.

The company’s other ratings, including its A3 issuer and senior unsecured bond ratings, were affirmed.

Coca-Cola European is the new European bottler that was formed through the merger of Coca-Cola Enterprises, Inc. (A3, on review for downgrade), Coca-Cola Iberian Partners, SA (unrated) and Coca-Cola Erfrischungsgetränke GmbH (unrated).

The outlook is stable.

Moody’s said the ratings reflects Coca-Cola European’s position as the Coca-Cola System's largest independent bottler following the May 2016 merger between Coca-Cola Enterprises, Coca-Cola Iberian and Coca-Cola Erfrischungsgetränke. Coca-Cola European serves many of Coca-Cola Co.’s (Aa3, stable) most important European markets including Belgium, France, Great Britain, Germany, Spain, Portugal, Luxembourg, Monaco, the Netherlands, Norway and Sweden, where the Coca-Cola brand enjoys strong market positions.

At the same time the rating incorporates initially higher leverage – approaching 4 times, integration challenges and a footprint that while broadened, still reflects a concentration in a number of developed European markets.

Coca-Cola European’s standalone rating is in the Baa range, but the importance of the bottler to Coca-Cola Co. provides one notch of ratings lift leading to the A3 senior unsecured rating, Moody’s said.

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