Moody's rates Brasil Foods notes Ba1

Moody's Investors Service said it affirmed the ratings of Brasil Foods SA (formerly named Perdigão) and assigned a Ba1 foreign-currency rating to the company's proposed $500 million 10-year guaranteed senior unsecured note issuance.

The notes will be issued by BFF International, Ltd., a wholly owned Cayman Islands subsidiary of Brasil Foods, but unconditionally and irrevocably guaranteed by Brasil Foods and Sadia.

Proceeds will be used to refinance debt and for general corporate purposes.

Brasil Food's Ba1 rating is supported by the company's position as one of the largest food processors in the Brazilian market with leading market positions and close to 50% of sales derived from processed products with good segment diversification, the agency said.

The rating also is supported by the company's conservative leverage policy of maintaining a total debt-to-EBITDA ratio below 3 times, Moody's said.

The Ba1 rating is constrained by exposure to foreign exchange variation, export market disruptions, as well as to the volatility of dairy and grain commodity costs, the agency noted.

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