Fitch Affirms Panamco's `BBB' Rating.

Business Editors

CHICAGO--(BUSINESS WIRE)--Sept. 6, 2001

Fitch has affirmed the `BBB' rating of Panamerican Beverages, Inc.'s (Panamco) senior notes due 2003 and 2009. In conjunction with this rating action, Fitch has also affirmed the `BBB' senior unsecured foreign currency rating and the `BBB+' senior unsecured local currency rating of the company. The Rating Outlook of both ratings is Stable.

The foreign currency rating of Panamco exceeds the sovereign ratings of the countries in which the company operates due to the geographic diversity of the company's cash flow from operations and the strategic importance of Panamco to The Coca-Cola Company (Coca-Cola).

During 2000, Panamco underwent a massive reorganization program that resulted in the shutting down of production plants, the restructuring of distribution systems and the termination of employees. The cash charges associated with this program totaled $89 million. This reorganization has improved the competitiveness of Panamco's cost structure and should enable the company to grow its EBITDA during a difficult economic period in three of its main markets - Brazil, Venezuela, and Colombia.

Excluding the non-recurring reorganization charges and the interest expense associated with the back-to-back loans the company had received for operations in Venezuela, the company had an EBITDA-to-interest expense ratio of 3.8 times (x) and a total debt-to-EBITDA ratio of 2.6x during 2000.

In 2001 and 2002, Panamco's credit ratios are expected to be strong for the rating category given the company's sound business position and implicit support from Coca-Cola. From a cash flow perspective, EBITDA should increase from $475 million in 2000 to approximately $550 million in 2001. This result is being driven by the company's improved production and distribution cost structure - particularly in Venezuela and Brazil. On the debt side, in October 2000 Panamco launched an initiative to reduce outstanding debt by 30% over the next two-year period. The aggressive debt reduction achieved by the company during the first half of 2001, coupled with plans to repay an additional $200 million by the end of 2001, puts the company ahead of its goal by a considerable margin, for a total of $320 million in debt reduction since October 2000. As a result of the aforementioned, the company should end 2001 with an EBITDA-to-interest expense ratio of approximately 5x and could end 2002 with an EBITDA-to-interest expense ratio in excess of 8x.

Panamco is the largest Coca-Cola bottler in Latin America, accounting for approximately 28% of The Coca-Cola Company's Latin American sales and 8% of its worldwide sales during 2000. Incorporated in Panama, Panamco has bottling operations in Mexico, Venezuela, Colombia, Brazil, Guatemala, Nicaragua, and Costa Rica. In total, more than 123 million people reside in its bottling territories. The largest single shareholder of Panamco is Coca Cola with an ownership stake of approximately 25%.