Monday, 2 February 2009

Moody's Sees Debt at Meatpacker Independencia Reaching Even Higher Levels. Rating Oulook Trimmed to Negative

Moody’s Investors Service lowered Brazilian meat processor Independencia’s outlook on its ratings to negative from stable, citing an expected increase in the company’s total debt to free cash flow to levels higher than five times Ebitda. The company’s B2 local currency corporate family rating was affirmed, so were Independencia's B2 guaranteed senior unsecured ratings. We said not long ago here that Independencia asked bondholders to tender $62 million of the $225 million outstanding bonds due in 2017, and $83 million of the $300 million in 2015 bonds; the offer expires on Feb. 18.

Moody's analyst
Soummo Mukherjee said ''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.´´

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