Moodys.com
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Correction to Text, January 30th, 2009: Moody's changes Independência's outlook to negative

 The document has been translated in other languages

30 Jan 2009

Approximately USD 525 million in debt securities affected

Sao Paulo, January 30, 2009 -- Substitute June 30, 2008 for June 30, 2009 in eighth paragraph, third sentence, "Quantitatively, the ratings could be downgraded if Total Debt to EBITDA remains above 6.0 times (LTM September 2008 was 6.9 times) or EBITA to Gross Interest Expense below 1.0 time (3Q08 was 0.9 times), both on a last twelve month basis as of June 30, 2009." Revised release follows:

Moody's affirmed Independência S.A.'s ("Independência") B2 local currency corporate family rating and B2 guaranteed senior unsecured rating, but changed the outlook to negative from stable.

"The negative outlook for Independência's ratings reflects our expectation that the company's leverage, as measured by Total Debt to EBITDA and by Net Debt to EBITDA, is likely to continue to be above 5.0 times and 4.0 times, respectively, which are Moody's triggers for downward pressure on the company's B2 ratings," affirmed Moody's VP Senior Analyst, Soummo Mukherjee. "At the same time, the negative outlook reflects the challenges that the Brazilian industry is experiencing in terms of beef processing overcapacity in relation to the size of the Brazilian cattle herd, combined with a weaker outlook for fresh beef and leather export prices and volumes due to the adverse global economic environment and the low availability and high cost of trade finance credit for importers, added Mukherjee"

Independência recently announced a consent solicitation to modify its debt incurrence covenant to allow greater flexibility in light of the devaluation of the BRL against the USD, and an amendment to its change of control provision, allowing the company to repurchase its notes in the case of a change in control only if there is a subsequent rating agency downgrade. Additionally, Independência announced a tender offer to its 2015 and 2017 bondholders for up to 27.5% or USD 144.4 million of its bonds outstanding, at a discount to par of 37% for bondholders that tender by February 18th and a lower discount to par of 34% for bondholders that tender by February 3rd.

We consider this an opportunistic tender offer and not a distressed exchange in the interest of defaut avoidance since Moody's believes Independência's motivation for the offer is to reduce USD denominated debt and consequently its forex exposure. Moody's B2 rating already considered the increase in leverage resulting from the currency devaluation, as stated in our press release on November 28th, 2008. The company's debt service burden is expected to be sustainable because of the BNDESPAR capital injection and, to a lesser extent, higher margins on its USD denominated revenues, which represent about 50% of sales. The company has stated that the tender offer will be financed with a new long-term, senior unsecured loan denominated in BRL and equivalent to up to USD 130 million. Independência's liquidity is also expected to improve with the disbursement of the remaining BRL 200 million of the BNDESPAR equity injection by the end of March 2009. The first tranche from BNDESPAR of BRL 250 million was received in November 2008.

However, with over 80% of its debt denominated in USD as of September 30th, 2008, Independência's leverage is likely to remain high despite expected higher EBITDA due to increased utilization rates of newly installed capacity and strong domestic market performance. The BRL/USD exchange rate ended 2008 at 2.36, representing 24% depreciation against the 1.99 rate on September 30th, 2008.

According to the Brazilian Foreign Commerce Secretariat ("SECEX"), average prices (USD / ton) of Brazilian fresh beef exports fell 15% in the 4th quarter of 2008 compared to the 3rd quarter. At the same time, beef export volumes fell 59%, causing overall industry beef export revenues to decline by 65% in US dollar terms and 52% in BRL terms.

The declines reflect reduced demand in many import markets, such as Europe, causing pressure on pricing, and difficulties in obtaining trade finance by importers in Russia, the most important export market for Brazilian beef exports. Many Russian importers are trying to renegotiate contracts and postpone new orders, causing an increase in inventories and receivables. Over the past few years, Russia has become the most important market for Brazilian beef exports, representing close to 36% of Brazil's fresh beef exports in 2008. Russia is also Independência's largest importer, representing 12.7% of the company's export revenues in the 3Q08. Independência and many of its peers are therefore likely to report much higher working capital needs in their 4th quarter 2008 results, leading to weaker cash flow from operations.

Independência's rating would likely be downgraded if the March 2009 second tranche of BNDESPAR's capital increase of BRL 200 million experiences delays. Additionally, negative pressure could arise if the company experiences a significant deterioration in its ability to renew its trade finance lines, if operating margins decline sharply and/or if leverage and cash flow metrics fail to improve from current weak levels. Quantitatively, the ratings could be downgraded if Total Debt to EBITDA remains above 6.0 times (LTM September 2008 was 6.9 times) or EBITA to Gross Interest Expense below 1.0 time (3Q08 was 0.9 times), both on a last twelve month basis as of June 30, 2009. All ratios are adjusted according to Moody's standard analytic adjustments (see "Moody's Approach to Global Standard Adjustments in the Analysis of Financial Statements for Non-Financial Companies - Part I", February 2006).

A stabilization of the outlook would require evidence of improved leverage and cash flow metrics. Quantitatively, the stabilization would require Total Debt to EBITDA to be sustained below 6.0 times (LTM September 2008 was 6.9 times) and Funds from Operations (FFO) to Net Debt to be sustained above 10.0% (LTM September 2008 was 1.7%).

Moody's last rating action on Independência was on November 28, 2008, when we affirmed Independência's B2 ratings following the announcement of the capital increase of up to BRL 450 million by BNDESPAR in Independência's parent company, Independência Participações S.A., and subsequently to be transferred to Independência.

The principal methodology used in rating Independência was that for Moody's Global Natural Product Processors (published in March 2006), which can be found at www.Moodys.com in the Credit Policy & Methodologies directory, in the Ratings Methodologies subdirectory. Other methodologies and factors that may have been considered in the process of rating this issuer can also be found in the Credit Policy & Methodologies directory.

Ratings affirmed with a negative outlook:

- Independência S.A.'s Corporate Family Rating: B2

- USD 225 million 9.875% senior unsecured guaranteed notes due 2017: B2

- USD 300 million 9.875% senior unsecured guaranteed notes due 2015: B2

Headquartered in Cajamar, São Paulo, Brazil, Independência is Brazil's fourth largest producer of fresh and frozen beef and the second largest producer of wet blue leather with operations in seven Brazilian states and Paraguay. At the end of September 30th, 2008, Independência had fourteen beef slaughtering and deboning facilities, three tanneries, two dry and salted beef units, five biodiesel production modules and four cold and dry storage and distribution facilities.

Sao Paulo
Soummo Mukherjee
Vice President - Senior Analyst
Corporate Finance Group
Moody's America Latina Ltda.
55-11-3043-7300

Sao Paulo
Alexander I. Carpenter
VP - Regional Credit Officer
Corporate Finance Group
Moody's America Latina Ltda.
55-11-3043-7300

Correction to Text, January 30th, 2009: Moody's changes Independência's outlook to negative
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR  PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​​​
Moodys.com