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Moody's upgrades Marfrig
Moody's Investors Service said it upgraded Marfrig Global Foods SA corporate family rating to Ba2 from Ba3.
“The upgrade to Ba2 reflects Marfrig's continued strong operational performance and adequate liquidity, which increases its ability to weather the volatility of the beef business, and the liability management strategies implemented, which has led to lower financial expenses. Moody's expects Marfrig to continue to extend debt maturities and reduce 2022-2024 maturities, which represent about 38% of total debt at the end of 1Q22,” the agency said in a press release.
However, Moody’s noted Marfrig’s strengths are balanced against its narrow focus in the cyclical beef industry, which is characterized by volatile earnings, and the reliance on the North America segment, which delivers about 75% of revenues. “A deceleration in demand in the United States would lead to weaker margins and pressure Marfrig's credit metrics.”
The positive outlook is unchanged.
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