Fitch rates JBS notes B+/RR4

Fitch Ratings said it assigned a B+/RR4 rating to JBS SA's proposed $400 million senior unsecured notes due 2014 issued though its wholly owned subsidiary JBS USA, LLC and guaranteed by JBS USA's domestic subsidiaries, by parent JBS USA, Holdings, Inc. and by ultimate parent JBS.

The foreign- and local-currency issuer default ratings are B+, the long-term national scale rating is BBB+(bra), the $275 million outstanding senior notes due 2011 and $300 million outstanding senior notes due 2016 are rated B+/RR4 and R$400 million proposed bank credit facility long-term national scale rating is BBB+(bra).

The outlook is stable.

Proceeds will be used to repay part of the $659 million intercompany debt for the Smithfield's U.S. beef acquisition.

Ratings are based on the strong and global competitive position of its businesses, the commodity and cyclical risks associated with the meat business, and the company's high financial leverage, resulting from the aggressive growth strategy of its businesses over the past few years, according to the agency.

Ratings also incorporate expectations that JBS will maintain its liquidity position and that its credit measures will gradually strengthen due to the acquisition of Tasman and Smithfield Beef during 2008, the agency noted.

Pro forma net debt-to-EBITDA ratio was 2x in 2008, compared with 3.7x in 2007.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.