Page 81 - TURKRptAug20

Additionally, CCI has a seven-year swap contract, allowing it to pay its USD-denominated interest rate charges on the 2024 bond at a USD/TRY rate of 3.8x.
CCI is also hedging up to $150mn of principal at the same USD/TRY exchange rates in case the market USD/TRY exchange rate moves to within the 3.8-8.5 range. It is maintaining some degree of hedging in case the Turkish lira depreciates further.
Around 60% of total debt is represented by a $500mn eurobond maturing in September 2024.
In May 2020, the company repaid a $80mn US Private Placement (USPP) debt with FCF generation. The next-largest maturity is in 2023 with $120mn USPP, which Fitch assumes will also be repaid with cash.
CCI has an operational and strategic relationship with The Coca-Cola Company (TCCC), which owns 20.1% of CCI.
CCI is among the top 10 largest bottlers in the Coca-Cola system in terms of sales volume, and the highest-rated corporate in Turkey.
CCI operates in Turkey, Pakistan, Kazakhstan, Azerbaijan, Kyrgyzstan, Turkmenistan, Jordan, Iraq, Syria and Tajikistan.
Compared to its main peers, Coca-Cola European Partners plc (BBB+/Stable) and Coca-Cola Amatil Limited (BBB/Stable), CCI is smaller, has a slightly weaker EBITDA margin, operates in more volatile emerging markets and has greater exposure to FX risks.
Fitch forecasts USD/TRY average exchange rate of 6.77 in 2020.
It also forecasts CCI’s Turkish sales volumes declining by 30% in 2020, driven by the impact of the pandemic as well as the discontinuation of the non-ready-to-drink tea from 2020.
It sees international sales volume declining by high single digits in 2020. The rating agency foresees continuous dividend growth by CCI.
Due to the operating environment of the countries in which the company operates, and to forex exposure, an upgrade of the IDRs is unlikely, the rating agency also noted.
81​ TURKEY Country Report​ August 2020 ​ ​www.intellinews.com