Research Update: Marfrig Global Foods 'B+' And 'brA-' Ratings Placed On CreditWatch Positive On Announced Acquisition Of National Beef

Brazil-based protein processor Marfrig announced the acquisition of a 51% controlling stake of the fourth largest U.S. beef processor, National Beef Packing Co. LLC (National Beef), for $969 million to be paid in cash. The company also announced that it intends to sell its subsidiary Keystone Foods LLC, which, along with the National Beef acquisition, could accelerate debt reduction. We're placing our 'B+' global scale and 'brA-' national scale corporate credit ratings on Marfrig on CreditWatch Positive, which indicates that we could either affirm or raise the ratings over the next 90 days once we have more detailed information about the transaction, the divestment plans, and National Beef's operations. We're also placing Marfrig's bonds on CreditWatch Developing. Due to structural

...+ Brazil-based protein processor Marfrig announced the acquisition of a 51% controlling stake of the fourth largest U.S. beef processor, National Beef Packing Co. LLC (National Beef), for $969 million to be paid in cash. + The company also announced that it intends to sell its subsidiary Keystone Foods LLC, which, along with the National Beef acquisition, could accelerate debt reduction. + We're placing our 'B+' global scale and 'brA-' national scale corporate credit ratings on Marfrig on CreditWatch Positive, which indicates that we could either affirm or raise the ratings over the next 90 days once we have more detailed information about the transaction, the divestment plans, and National Beef's operations. + We're also placing Marfrig's bonds on CreditWatch Developing. Due to structural subordination, the issue-level ratings could move in different directions depending on where additional debts are issued....

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