The Coca-Cola Company
) franchise bottler,
Coca-Cola FEMSA S.A.B. de C.V.
), offers 10-year bond at a yield of 5.46%, which is the lowest
ever achieved by any corporate issues in the Mexican Peso market.
KOF will use the proceeds for general corporate purpose,
including capital expenditure, as well as for enhancing its
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COCA-COLA FEMSA (KOF): Free Stock Analysis
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Coca-Cola FEMSA is co-owned by the Coca Cola Company and
Fomento Economico Mexicano S.A.
) - also known as FEMSA. It produces and distributes Coca-Cola,
Fanta, Sprite, Del Valle, and other trademark beverages of The
Coca-Cola Company, bottled water, juices, teas, isotonics, beer,
and other beverages in Mexico, Guatemala, Nicaragua, Costa Rica,
Panama, Colombia, Venezuela, Brazil, Argentina and Philippines,
along with some of these territories.
Coca-Cola FEMSA reported a 7.7% slip in its first-quarter profit
in Apr 2013. The drop was the result of higher freight and labor
costs in some countries as well as increased marketing investment
in South America.
The issuance of the bond will improve the liquidity of KOF, but
at the cost of increasing long-term debt. KOF had long-term debt
of Ps. 6.12 billion ($483.4 million) at the end of Mar 2013.
Coca-Cola FEMSA is on a buying spree and is expanding its
operations beyond Latin America. In Jan 2013, it acquired a 51%
interest in the Coca Cola company's franchise bottler in the
Philippines, Coca-Cola Bottlers Philippines, Inc. Again, Femsa
Comercio forayed into the drugstore business through the
acquisition of a controlling stake in Farmacias Yza in Southeast
In Jan 2013, Coca-Cola FEMSA entered into a definitive agreement
to acquire another Mexico-based Coca-Cola bottler Grupo Yoli,
S.A. de C.V. for $700 million. The deal also added two bottling
facilities and 20 distribution centers owned by Grupo Yoli to
FEMSA's asset base. The deal will extend Coca-Cola FEMSA's reach
to the state of Guerrero as well as to parts of the state of
Oaxaca - the two markets in which Grupo Yoli primarily operates.
The Coca-Cola Company has ownership interests in many other
bottling operations, including
Coca-Cola Enterprises Inc.
), Coca-Cola Hellenic Bottling Company S.A. and Coca-Cola Amatil
Ltd. Currently, Coca-Cola FEMSA carries a Zacks Rank #3