Moody's downgrades Coco-Cola

Moody's Investors Service said it downgraded the senior unsecured long term rating of the Coca-Cola Co. to A1 from Aa3 and affirmed its prime-1 short-term ratings.

The downgrade concludes a review for downgrade that began in August following the company's announcement that it had agreed to purchase Costa Ltd. for £3.9 billion in cash, Moody's explained.

The company expects the transaction to close in the first half of 2019, the agency noted.

The downgrade reflects a view that Coca-Cola has adopted a more aggressive financial policy, Moody's said.

The group's financial leverage will be more consistent with an A1 rating, the agency added, which is even after de-leveraging following a period of system restructuring.

The downgrade also reflects the risks associated with the $5 billion acquisition of the coffee business. While it provides diversification into a growing beverage space, it also introduces new risks since it operates differently than Coke's core, ready-to-drink packaged beverage businesses, Moody's said.

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