Fitch affirms Marfrig

Fitch Ratings said it affirmed Marfrig Alimentos SA's local- and foreign-currency issuer default rating at B+ and national scale rating at BBB+(bra). Marfrig Overseas Ltd.'s $375 million senior unsecured notes due 2016 were affirmed at B+/RR4.

The outlook is stable.

The affirmations follow Marfrig's plans to acquire Seara Alimentos Ltda., according to the agency, incorporating a strengthening of Marfrig's competitive position in the poultry and pork industries in Brazil as a result of this transaction, as well as an increase in its industrialized products production capacity.

The affirmations also incorporate an expectation that a majority of the transaction will be equity financed, resulting in a maximum net leverage ratio of about 4.3x, the agency said.

Marfrig's pro forma total debt-to-EBITDA ratio for the last 12 months was 5.2x, and net debt-to-EBITDA ratio was 3.8x.

Ratings reflect the company's aggressive growth strategy based on acquisitions, which have totaled more than 35 in the last three years, Fitch said.

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