Recipient email addresses will not be used in mailing lists or redistributed.
Use semicolon to separate each address, limit to 20 addresses.
characters you see
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
Don't want to see this again?
Accept our to continue to Moodys.com:
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 information 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
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.
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
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.
Global Credit Research - 26 Apr 2011
Approximately USD 500 million in rated debt affected
Sao Paulo, April 26, 2011 -- Moody's has assigned a B1 foreign currency rating to the proposed USD
500 million of senior unsecured guaranteed notes to be issued by Marfrig
Holdings (Europe) B.V., a wholly owned subsidiary
of Marfrig Alimentos S.A. ("Marfrig").
The notes will be unconditionally and irrevocably guaranteed by Marfrig
and certain subsidiaries of the guarantor. At the same time,
Marfrig's existing B1 senior unsecured and corporate family ratings are
affirmed. The proceeds of this issuance will be mainly used to
refinance short term maturing debt. The outlook for the ratings
The following rating was assigned:
USD 500 million senior unsecured guaranteed notes due 2018: B1 (foreign
The following ratings were affirmed:
- Corporate family rating: B1 (Global scale)
- USD 375 million 9.625% senior unsecured guaranteed
notes due 2016: B1 (foreign currency)
- USD 500 million 9.500% senior unsecured guaranteed
notes due 2020: B1 (foreign currency)
The outlook for all ratings is stable.
Marfrig's B1 rating reflects the company's more diversified portfolio
of products and by-products in animal proteins (beef, poultry,
pork, lamb and turkey), its growing portfolio of branded value-added
products, its broader geographic footprint and competitive cost-structure.
However, the rating also incorporates Marfrig's continuous weak
cash flow from operations, relatively high leverage, and the
remaining challenges in successfully integrating the Seara acquisition
of 2009, but more critically the USD 1.26 billion Keystone
acquisition in mid-2010, as well as two strategic Chinese
joint ventures that will require ongoing investments.
The proposed USD 500 million notes issuance is part of Marfrig's
liability management as most of the funds will be used to pay short term
maturing debt and the 2018 maturity of the proposed notes falls between
the maturities of two similar bonds. The B1 rating of the proposed
notes assumes that the final transaction documents will not be materially
different from draft legal documentation reviewed by Moody's to date and
that these agreements are legally valid, binding and enforceable.
In 2010, Marfrig's net revenues increased 65% from a year
before, however, the raise was mostly due to the Seara and
Keystone acquisitions rather than organic growth. More importantly,
Marfrig's gross margin and EBITDA margin increased to 16.5%
and 11.2% in 2010 from 13.1% and 8.7%,
respectively, in 2009. The evolution in margins was led by
higher prices and higher protein demands, both domestically and
from the export markets, and were achieved despite a 6% appreciation
of the BRL against the USD. The slightly better EBITDA margins
also improved Marfrig's leverage. We expect Marfrig's
leverage (Total Debt to EBITDA) to fall back to around 4.5x thanks
to the cash flow from Seara and the benefits of acquisition synergies.
Moody's also expects Marfrig's free cash flow generation to
improve based on the gradual recovery of export markets conditions and
by the continued development of the domestic Brazilian market where per-capita
consumption should trend upward, but perhaps at a more controlled
pace due to inflationary reservations.
In 2010, the company's liquidity slightly improved due to
effective control of working capital demands and the issuance of BRL 2.5
billion (approximately USD 1.3 billion) in new mandatory convertible
debentures, but since the convertibles were mostly used for the
Keystone down-payment, Marfrig's cash position returned
to around BRL 3.9 billion (approximately USD 2.3 billion)
versus the company's BRL 3.2 billion (approximately USD 1.8
billion) in short term debt maturing in 2011. The proposed USD
500 million issuance will further lengthen Marfrig's average debt
maturity as at least 75% will be used for short-term debt
Moody's regards as positive the fact that BNDES, through its equity
arm, BNDES Participações S.A. ("BNDESpar",
rated A3 local currency rating), is a strategic shareholder in Marfrig.
BNDESpar has a track record for sustaining its equity investments and
is a source of cheap financing for local currency debt in Brazil.
The stable outlook is based on our expectation that Marfrig will remain
focused in 2011 on completing the integration of its large acquisitions
and investments in China, while maintaining adequate liquidity and
financial metrics for its rating category. We expect the company
will prudently manage its liquidity, maintaining a minimum cash
position of BRL 2.6 billion, and capital structure.
Marfrig's rating would likely come under downward pressure if the company
faces greater than expected integration or operating challenges abroad
that leads Marfrig's EBITDA margins to drop significantly below 10%
for two consecutive quarters (margin was 11.2% in 2010).
Negative pressure is also likely if Marfrig's liquidity were to deteriorate.
Quantitatively, downward pressure on Marfrig's B1 rating or outlook
is likely if Total Debt / EBITDA is sustained above 6.0x (5.7x
in 2010), EBITA to gross interest expense falls below 1.0x
(1.0x in 2010) or if Retained Cash Flow to Net Debt is below 10%
(19.5% in 2010). All credit metrics are according
to Moody's standard adjustments and definitions.
The ratings or outlook could present upgrade pressure if Marfrig is able
to improve its liquidity profile and better manage its working capital
needs to strongly enhance its cash flow from operations on a sustained
basis. An upgrade would also require evidence that the company's
integration with Seara and Keystone, as well as its latest investments
in China, are on track and free cash flow will be positive on a
sustained basis. Quantitatively, an upgrade would require
CFO/ Net Debt approaching 20% (1.2% in 2010) and
Total Debt / EBITDA of near 4.0x (5.7x in 2010).
Finally, Marfrig's ability to consistently maintain EBITDA margins
above 5% during a down cycle in the global industry would be also
positive for the ratings.
The principal methodology used in rating Marfrig was that for Moody's
Global Food — Protein and Agriculture Industry (published in September
Marfrig, headquartered in São Paulo, Brazil,
is one of the largest animal protein processing companies in Brazil.
With 151 processing plants operating in 22 countries, including
Brazil, Argentina, Uruguay, Chile, England,
Northern Ireland, France, the Netherlands, and the USA.
Marfrig processes, prepares packages and delivers fresh, chilled
and processed beef, pork, chicken, lamb as well as leather
products to customers in Brazil and abroad, with approximately 40%
of its sales derived from exports. Along with its beef products,
the company also operates a wholesale food distribution business,
which delivers additional food products that it imports or acquires in
the local market.
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information and confidential and proprietary Moody's Investors
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of maintaining
a credit rating.
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.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
Vice President - Senior Analyst
Corporate Finance Group
Moody's America Latina Ltda.
MD - Corporate Finance
Corporate Finance Group
Moody's Investors Service
Moody's America Latina Ltda.
Moody's assigns B1 rating to Marfrig's USD 500 million proposed notes, stable outlook
Avenida Nacoes Unidas, 12.551
16th Floor, Room 1601
Sao Paulo, SP 04578-903
No Related Data.
© 2018 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 ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S 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. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S 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. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S 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 AND MOODY’S 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 OR MOODY’S 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.
CREDIT RATINGS AND MOODY’S 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 the Moody’s 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 SUCH RATING OR 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 rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS 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. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.
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 rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.