Research Update: Minerva S.A. 'BB-' And 'brA+' Ratings Affirmed Despite Higher Leverage; Outlook Still Stable

Brazil-based protein producer Minerva spent a significant amount of cash in 2017 as it ramped up the South American assets it acquired from JBS and assumed a more aggressive organic growth strategy in Brazil, which pressured its credit metrics and delayed the deleverage we expected. We're affirming our 'BB-' global scale corporate credit and issue-level ratings, as well as our 'brA+' national scale corporate rating on the company. The stable outlook reflects our expectation that working capital invested in second half of 2017 will boost the company's EBITDA and cash flow generation, supporting a gradual deleverage while it reaches a stronger geographic diversification and larger operating scale. On March 12, 2018, S&P Global Ratings affirmed its 'BB-' global scale and

...+ Brazil-based protein producer Minerva spent a significant amount of cash in 2017 as it ramped up the South American assets it acquired from JBS and assumed a more aggressive organic growth strategy in Brazil, which pressured its credit metrics and delayed the deleverage we expected. + We're affirming our '##-' global scale corporate credit and issue-level ratings, as well as our 'brA+' national scale corporate rating on the company. + The stable outlook reflects our expectation that working capital invested in second half of 2017 will boost the company's EBITDA and cash flow generation, supporting a gradual deleverage while it reaches a stronger geographic diversification and larger operating scale....

Research Update