Fitch affirms JSL

Fitch Ratings said it affirmed JSL SA's foreign-currency issuer default rating at BB-, local-currency issuer default rating at BB-, national scale rating at A(bra) and unsecured third debentures issuance at A-(bra).

JSL's ratings reflect its strong business profile, supported by leading position in the Brazilian logistics industry and diversified service portfolio, and its resilient operating performance over the last years, the agency said.

Leverage is considered high due to the combination of the company's ongoing growth strategy and its recent acquisition of Schio SA, the agency said.

JSL's main challenge is to effectively convert its business expansion into operating cash flow generation in order to reduce net debt to EBITDA to about 3.5 times from 4.0 times on a pro forma basis.

JSL's ratings are constrained by the company's close ties to macroeconomic conditions in Brazil, the capital-intensive nature of its business and by the company aggressive growth strategy, Fitch said.

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