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TEXT-S&P rates Marfrig Holdings Europe's notes 'B+'
January 9, 2013 / 6:57 PM / 5 years ago

TEXT-S&P rates Marfrig Holdings Europe's notes 'B+'

Jan 9 - Standard & Poor's Ratings Services said today that it assigned its
'B+' rating to Marfrig Holdings Europe B.V.'s planned $300 million senior
unsecured notes due 2017. 

The rating on the issue reflects the credit quality of both Brazil-based 
Marfrig Alimentos S.A. (Marfrig; B+/Negative/--), which will
irrevocably and unconditionally guarantee the bonds, and its most relevant
operating subsidiaries; we analyze these as a single group. 

The proposed bond issuance, together with the company's recent equity offering 
through which Marfrig raised about R$1 billion (or about $500 million), will 
improve its capital structure by reducing overall debt and extending its 
maturities, lowering the company's annual refinancing risks and sizable 
interest rate burden. "We expect Marfrig to continue this deleveraging trend 
and use most of the proceeds of both transactions to pay down debt as it comes 
due," said Standard & Poor's credit analyst Flavia Bedran. We also expect 
operating performance to improve thanks to both strong cash flows from its 
beef division and a gradual recovery in its poultry unit, as grain prices have 
softened. However, the outlook on the company's corporate credit rating 
remains negative as Marfrig confronts the volatility of the beef and poultry 
industry and the need to improve operating efficiencies to generate stronger 
discretionary cash flows.


RELATED CRITERIA AND RESEARCH

     -- Methodology And Assumptions: Liquidity Descriptors For Global 
Corporate Issuers, Sept. 28, 2011
     -- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008
     -- 2008 Corporate Criteria: Ratios And Adjustments, April 15, 2008


RATINGS LIST

Marfrig Alimentos S.A.
  Corporate credit rating           B+/Negative/--

Rating Assigned

Marfrig Holdings Europe B.V.
  $300M sr unsec notes              B+


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

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