S&P gives Frigorifico Concepcion bonds B

S&P said it gave a B rating to Frigorifico Concepcion SA’s planned $300 million of senior secured notes and changed the outlook to positive from stable. S&P also affirmed the company’s B ratings.

Concepcion will use the proceeds to repurchase the current tender offer for the $161 million of 10¼% senior secured bonds due 2025, and to bolster its liquidity and capital structure by extending debt maturities.

“We believe the company will prepay any left amount in the 2025 bond. Although the amount remaining after the tender is still uncertain, upon issuance, we will lower the rating on the current senior secured notes outstanding to B- from B. This is because the collateral will migrate to the new bond issuance, and the existing bonds will be unsecured, retaining less value for full recovery,” S&P said in a press release.

The new outlook reflects the view that Concepcion will continue increasing its scale and overall business profile with strong cash flow generation, the agency said.

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