Standard & Poor's Ratings Services said yesterday that it affirmed its ratings on PepsiAmericas Inc. The ratings outlook is stable.

About US$1.26 billion of total debt was outstanding at the company on 3 April.

The affirmation follows PepsiAmericas' announcement that it repurchased 10m shares of its outstanding common stock on 30 April. The shares were repurchased from JP Morgan under an accelerated program for a total cost of about $200m.

"This sizable up-front expenditure on share repurchases reduces the company's financial flexibility for opportunistic investments and acquisitions should they arise during the course of the year," said Standard & Poor's credit analyst Nicole Delz Lynch.

"However, Standard & Poor's expects that PepsiAmericas' free cash flow will be strong in 2004, and that year-end debt levels will remain relatively unchanged from the previous year. In addition, there is ample financial flexibility within current system credit measures for this transaction."