Morningstar DBRS Assigns Credit Rating of BBB with Stable Trend to Molson Coors Beverage Company’s New Debt Issuance

DBRS Limited (Morningstar DBRS) assigned a credit rating of BBB with a Stable trend to Molson Coors Beverage Company’s (Molson Coors or the Company; rated BBB with a Stable trend by Morningstar DBRS) EUR 800 million 3.800% Senior Unsecured Notes due 2032 (the Notes), with the offering expected to close on or about May 29, 2024, subject to customary closing conditions. Molson Coors intends to use the net proceeds of this offering for general corporate purposes, including the repayment of the EUR 800.0 million notes issued on July 7, 2016 upon maturity in July 2024.

The credit rating assigned to this newly issued debt instrument is based on the rating of an already-outstanding debt series of the above-mentioned debt instrument.

The notes will be guaranteed jointly and severally on a full and unconditional senior unsecured basis by certain subsidiaries of the Company (Guarantors). The notes will rank pari-passu with all of the Company’s and the Guarantors’ other unsubordinated debt and senior to all of its and the Guarantors’ future subordinated debt. The notes will be structurally subordinated to all present and future debt and other obligations of the Company’s subsidiaries that are not Guarantors. The notes and the guarantees will be effectively junior to its and the Guarantors’ current and future secured obligations to the extent of the assets securing such obligations.

Molson Coors’ credit ratings continue to remain supported by its strong brands and solid market positions; free cash flow-generating capacity; and geographic diversification despite the intense competition, exposure to mature beer markets, and commodity price volatility.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/Social/Governance factors) that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (January 23, 2024) at https://dbrs.morningstar.com/research/427030.

BUSINESS RISK ASSESSMENT (BRA) AND FINANCIAL RISK ASSESSMENT (FRA)

(A) Weighting of BRA Factors
In the analysis of Molson Coors, the relative weighting of the BRA factors was approximately equal.

(B) Weighting of FRA Factors
In the analysis of Molson Coors, the relative weighting of the FRA factors was approximately equal.

(C) Weighting of the BRA and the FRA
In the analysis of Molson Coors, the BRA carries greater weight than the FRA.

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

Morningstar DBRS applied the following principal methodology:
-- Global Methodology for Rating Companies in the Consumer Products Industry (April 15, 2024),
https://dbrs.morningstar.com/research/431171.

Morningstar DBRS credit ratings may use one or more sections of the Morningstar DBRS Global Corporate Criteria (April 15, 2024), https://dbrs.morningstar.com/research/431186, which covers, for example, topics such as holding companies and parent/subsidiary relationships, guarantees, recovery, and common adjustments to financial ratios.

The following methodology has also been applied:
-- Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (January 23, 2024) https://dbrs.morningstar.com/research/427030.

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

A description of how Morningstar DBRS analyzes corporate finance transactions and how the methodologies are collectively applied can be found at: https://dbrs.morningstar.com/research/431153.

The credit ratings were initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for these credit rating actions.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with these credit rating actions.

This credit rating is endorsed by DBRS Ratings Limited for use in the United Kingdom, and by DBRS Ratings GmbH for use in the European Union, respectively. The following additional regulatory disclosures apply to endorsed credit ratings:

Each of the principal asset class methodologies employed in the analysis addressed one or more particular risks or aspects of the rating and were factored into the rating decision. Specifically, “Global Methodology for Rating Companies in the Consumer Products Industry” (April 15, 2024) was the primary rating methodology applied to determine the ratings assigned to Molson Coors. “Guarantees and Other Forms of Support” section of Morningstar DBRS Global Corporate Criteria (April 15, 2024) was applied to assess the corporate structure of Molson Coors and to determine the rating on the Senior Unsecured Notes issued by subsidiary Molson Coors International LP. “Commercial Paper Liquidity Support for Nonbank Issuers” section of Morningstar DBRS Global Corporate Criteria (April 15, 2024) was applied to ensure that the provided liquidity that supports the Commercial Paper rating was consistent with the Morningstar DBRS criteria.

The last rating action on this transaction took place on November 20, 2023, when Morningstar DBRS upgraded the credit ratings on Molson Coors to BBB from BBB (low) and R-2 from R-2 (low) with Stable trends.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS trends and credit ratings are under regular surveillance.

For further information on Morningstar DBRS historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on Morningstar DBRS historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

Lead Analyst: Vikas Munjal, Vice President, Diversified Industries
Rating Committee Chair: Tim O'Brien, Managing Director, Global Head of Diversified Industries
Initial Rating Date: March 21, 2005

Information regarding Morningstar DBRS ratings, including definitions, policies, and methodologies, is available on dbrs.morningstar.com or contact us at info-DBRS@morningstar.com.

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