DBRS Upgrades The Pepsi Bottling Group, Inc.’s $1.3 Billion Notes to AA (low)

On October 22, 2008, DBRS assigned a rating of A (high) with a Stable trend to Bottling Group, LLC’s issue of $1.3 billion, 6.95% Senior Unsecured Notes due March 15, 2014 (the Notes). Bottling Group, LLC is the principal operating subsidiary of The Pepsi Bottling Group, Inc. (PBG or the Company).

At the time of issue, DBRS indicated that the notes would benefit from a guarantee provided by PepsiCo, Inc., which, pursuant to the terms of the prospectus supplement dated October 21, 2008, would likely be effective in February 2009. DBRS stated that once the guarantee became effective, the rating would likely be revised to reflect the rating of the guarantor (PepsiCo, Inc.).

DBRS confirms that the guarantee has indeed become effective, providing PepsiCo, Inc.’s full support to the Notes on the same basis as PBG’s other guaranteed indebtedness. Accordingly, DBRS has upgraded the Notes from A (high) to AA (low) – reflecting PepsiCo, Inc.’s current rating. The trend remains Stable.

DBRS notes that PepsiCo, Inc.’s well-established brands, strong market position and improving diversification continue to drive relatively stable performance, despite challenging macroeconomic conditions. For the year ended December 31, 2008, the Company generated operating earnings (before unusual items) of $6.9 billion, on sales of $43.3 billion, compared with operating earnings of $7.2 billion, on sales of $39.5 billion in F2007.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodology is Rating Consumer Products, which can be found on our website under Methodologies.

This is a Corporate rating.