Moody's reviews Cott

Moody's Investors Service said it placed on review for downgrade Cott Corp.'s B1 corporate family and probability-of-default ratings and B2 rating (LGD5, 74%) for its $275 million 8% senior subordinated notes due 2011.

Moody's said the possible downgrade reflects a very difficult year in which Cott's revenue and profitability were hurt by shrinking carbonated soft drink volumes, high commodity costs and its impairment charges to write down all of the goodwill relating to the U.S. business.

Cott also said it is negotiating with Wal-Mart to avoid loss in shelf space and merchandising support for private label carbonated soft drinks. The company also said it would be late filing its 2007 10-K and that it would report a material weakness in financial controls, the agency said.

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