S&P: J&F Investimentos on positive watch

Standard & Poor’s said it affirmed the B+ global scale and brBBB national scale corporate credit ratings on J&F Investimentos SA.

The agency also said it placed the ratings on CreditWatch with positive implications.

S&P also said it placed the brBBB rating on the debentures issued by Eldorado Brasil Celulose SA and guaranteed by J&F on CreditWatch positive.

The Credit Watch positive listing reflects a potential one-notch upgrade to J&F’s ratings if, after the closing of the acquisition, the company’s liquidity improves due to the dividend stream coming from a more mature business such as Alpargatas, the agency said.

As an investment holding company, J&F has sought to enhance its asset portfolio by strengthening operations, S&P said.

As a result, the purchase of Alpargatas could also weigh on J&F’s portfolio diversification and quality as Alpargatas has been showing a resilient cash flow generation and very light balance sheet, the agency said.

S&P said it will continue to monitor regulatory approvals to this transaction and the potential effects it could have on J&F’s capital structure and its liquidity.

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