USA: Moody’s upgraded the foreign currency issuer rating of AmBev to B1 from B2 and affirmed the company’s global local issuer rating of Baa3. The outlook on the global local rating is developing.

The rating action is the direct result of Moody’s having upgraded Brazil’s country ceiling for foreign currency bonds and notes to B1, from B2. The upgrade reflects Moody’s view that a continued export expansion combined with less reliance on foreign-currency borrowing - which has sharply reduced the ratio of external debt to exports - is sustainable.

AmBev’s global local issuer rating of Baa3 is based on the company’s strong and profitable beer and beverage franchise in its core market of Brazil, and its strong presence in many other markets.

In August 2004, the company merged with Interbrew to form the largest beer company by volume globally. The transaction is expected to result in very little change in debt protection measures at AmBev, Moody’s said, and adds the benefits of greater diversity and more stable markets in the overall mix of AmBev’s businesses, offset by the greater challenges of managing a more widespread geographic region.

AmBev will gain control of Labatt in Canada, and will assume C$1.3 bln of debt, although the unwinding of the relationship with Femsa will leave AmBev without a partner in Mexico.

Moody’s does not rate debt at Labatt. The final structure of the assumed contractual debt obligations is not yet known. The developing outlook reflects remaining uncertainties related to the transaction, some of which could have either positive or negative impact on AmBev´s outlook. These uncertainties include the ultimate structure of the North American subsidiary debt.

15 September, 2004