Fitch assigns PepsiCo 10-year unsecured notes 'AA-'
May 20, 2008
by Eric Schroeder
CHICAGO — Fitch Ratings has assigned an "AA-" rating to Purchase, N.Y.-based PepsiCo, Inc.’s $1.75 billion, 5% 10-year senior unsecured notes due June 1, 2018, while maintaining a "stable" outlook for the company.
According to Fitch, the ratings reflect PepsiCo’s "diverse food and beverage product mix and its ability to consistently generate substantial operating cash flow."
"While PepsiCo is currently facing the challenges of commodity cost pressures and a weak U.S. economy, where it derives approximately 56% of its net revenue, the company continues to maintain its high operating margins, through productivity initiatives and effective pricing," Fitch said.
Fitch noted that PepsiCo’s credit statistics over the past 12 months have been in line with expectations, and the company’s credit profile is stronger than similarly rated food and beverage companies.