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Bond Market News
JBS Upgraded To Investment Grade Rating of BBB-
June 9, 2021
Fitch Ratings has upgraded JBS’ Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to investment grade territory BBB- from BB+. JBS’ guaranteed senior unsecured bonds have also been upgraded and its new benchmark senior unsecured sustainability-linked notes have been assigned a BBB- rating. The rating outlook is Stable. The upgrade reflects JBS’s strong business profile, low leverage, a favorable debt amortizing profile, strong liquidity and positive FCF generation, long-lasting access to the international market and recent court settlements. Fitch predicts that JBS’ net leverage will remain below 2.0x in 2021 as a result of sales and EBITDA growth due to the strong performing US operations, such as US beef, further supported by strong overall demand for protein, high beef prices and the economic recovery. The ratings agency also cited the company’s plans of buying bolt-on acquisitions to enhance its portfolio, which are yet not expected to increase net leverage much more than 2.5x in 2021. Fitch noted that the ratings will remain constrained due to JBS’ ownership concentration and corporate governance structure.
JBS´dollar bonds were up with its 4.25% 2031s up 0.94 to 102, yielding 4%.
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