Standard&Poor's Ratings Services ratings on Brazil-based food producer Marfrig Alimentos S.A. reflect the company's highly leveraged financial profile and fair business profile. Marfrig's aggressive financial policies result from its past few years of growth through sizable acquisitions financed mainly with additional debt. We believe that the acquisitions have improved Marfrig's business profile through economies of scale, geographic and portfolio diversification, and greater participation of industrialized and processed food in its consolidated revenues. However, it has substantially increased its leverage and interest burden. Coupled with higher input prices, this has significantly pressured the company's cash flows and weakened its credit metrics. Marfrig's operations have underperformed our expectations in first-half 2011. Difficult market conditions, including high cattle and grain costs;
