Fitch: Marfrig tap issue B

Fitch Ratings said it assigned a B rating with recovery rating of RR4 to Marfrig Global Foods SA's tap issuance of its $500 million senior unsecured 2020 notes.

The proceeds are expected to be used to refinance debt maturities and extend debt maturity schedule, Fitch said.

The company has a local-currency issuer default rating of B, foreign-currency issuer default rating of B and national scale rating of BBB(bra).

Marfrig Overseas Ltd. has a foreign-currency issuer default rating of B, along with B ratings and recovery ratings of RR4 to its senior unsecured notes due 2016 and senior unsecured notes due 2020.

Marfrig Holdings (Europe) BV has a foreign-currency issuer default rating of B and B ratings with recovery ratings of RR4 to its senior unsecured notes due 2017, senior unsecured notes due 2018 and senior unsecured notes due 2021.

Fitch said it expects Marfrig's net debt-to-EBITDA ratio to organically fall to below 4.0x by 2015 from 4.2x at year-end 2013.

The agency also said it expects Marfrig to gradually improve free cash flow after 2014 and operating margin due to better asset and logistics management and lower capital expenditure.

Marfrig has simplified its organizational structure and decreased execution risk with the divestment of Seara Brazil during 2013, Fitch said.

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