Fitch Affirms Embotelladora Andina `A-` Rating.

Business Editors

CHICAGO--(BUSINESS WIRE)--May 17, 2001

Fitch affirms its `A-` foreign currency ratings of Embotelladora Andina's (Andina) bonds due in 2007, 2027, and 2097.

This rating action takes into consideration Andina's proposed issuance of bonds totaling 7,000,000 Unidades de Fomento (approximately $192 million) bonds due in 2008 and 2026. The proceeds of the bonds are expected to be used to fund future acquisitions by the company and other general corporate purposes.

The ratings are supported by Andina's below-average business risk due to the strong demand for Coca-Cola products within its bottling territories and the importance of the company to The Coca-Cola Company, which owns 11% of the company's equity. The ratings also take into consideration the prudence in which Andina has historically pursued acquisition opportunities in the region, and a belief that any new territories purchased by the company would generate cash flow that would justify the acquisition cost and the investment grade ratings. This consideration is balanced against the fact most of the company's future growth will occur outside of Chile - the company's most stable and profitable market.

Andina ended 2000 with an EBITDA-to-interest expense ratio of 6.2 times (x) and a total debt-to-EBITDA ratio of 1.8x. These were improvements from 4.6x and 2.6x, respectively, in 1999. The rebound in the company's credit ratios were driven by an 18% increase in EBITDA, which resulted from cost cutting measures and increased volumes, and by a 33% reduction in gross debt. Prices per unit case remained relatively flat throughout the year in all markets. Andina continues to be extremely liquid, ending 2000 with approximately $322 million of cash and marketable securities and $308 million of gross debt. Andina doesn't face a major debt amortization until 2007, when the company's $150 million notes mature.

While the peso-denominated bonds should decrease the company's cost of financing and will eliminate some of the mismatch between the currencies of the company's revenues and its debt, gross debt will increase to approximately $470 million in the near term. Fitch believes that in the near to medium term it is highly probable that Andina will use its large cash and marketable securities balance to continue to aggressively repurchase its dollar-denominated bonds (in the past 12 months the company has repurchased approximately $100 million of debt). As a result, the company's total debt-to-EBITDA ratio should be less than 1.8x by year-end 2002. In 2003, the company's EBITDA-to- interest expense ratio should be greater than 8.5x.

Andina is the largest Coca-Cola bottler in Chile and one of the largest in Brazil and Argentina. The company's Chilean territory is comprised of the Greater Santiago Region. In Argentina, Andina operates in the provinces of Cordoba, Mendoza, San Juan, San Luis, Entre Rios, and Santa Fe. Andina has been Coca-Cola's bottler for the city of Rio de Janeiro since 1994. In January 2000, the company expanded its operations within Brazil when it acquired Nitvitgov Refrigerantes S.A. (NVG) for $72.6 million of cash and the assumption of $10.4 million of debt. NVG is Coca-Cola's bottler in Niteroi, Vitoria, and Governador Valadares. These cities are located in the states of Espirito Santo and Minas Gerais.

Andina's average 2000 market shares in these territories were 70% (Chile), 57% (Brazil - not including NVG) and 50% (Argentina). During 1999, the market share in these territories were 71%, 53%, and 53%, respectively. The company's market share in its new Brazilian territory (NVG) was 45% during 2000. In addition to selling soft drinks, Andina bottles and distributes juices and mineral water in Chile and mineral water in Brazil. The company also distributes Kaiser and Heineken beer in Brazil.