S&P rates NBM Holdings notes BB-

S&P said it assigned a BB- rating to NBM US Holdings Inc.'s proposed senior unsecured notes.

The agency also said it assigned a 3 recovery rating to the proposed notes, which indicates 50% to 70% expected default recovery.

NBM is a wholly owned subsidiary of Marfrig Global Foods SA and it consolidates the operations of the group's U.S. subsidiary, National Beef Packing Co. LLC.

Marfrig will fully and unconditionally guarantee the notes, S&P noted.

Therefore, the debt rating on NBM's new notes mirrors the issuer credit rating on Marfrig, the agency explained.

The company will use the proceeds to fund the tender offers of its outstanding 2021 and 2023 notes and extend the debt maturity profile, S&P said.

The 3 recovery rating indicates 50% expected default recovery.

The hypothetical default scenario would occur in 2023 amid a combination of higher cattle prices, lower demand for beef and tighter access to credit markets, S&P said.

The agency said it has valued the company on a going-concern basis, using a 5x multiple applied to the pro forma projected emergence-level EBITDA.

© 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.