Standard&Poor's Ratings Services' ratings on Brazil-based food producer Marfrig Alimentos S.A. (Marfrig) reflects the company's highly leveraged financial profile, which is a result of several acquisitions in the past few years, as well as potential margin volatility because of the exposure to global commodity prices, and still-limited benefits from its stronger business portfolio. We believe Marfrig has limited capacity to reduce debt levels, even though recent acquisitions have improved the company's business profile. Marfrig's improved asset portfolio and geographic diversification should bring more stable cash flow generation, but the company's deleveraging may be lengthy because of the lower EBITDA contribution of acquired businesses coupled with unfavorable market fundamentals in some countries where Marfrig operates, such as Argentina and
