Moody's may cut Bracol

Moody's placed the Ba3 ratings of Bracol Holding Ltda., 77.17% owner of unrated Bertin SA, on review for possible downgrade.

Given the recent accelerated deterioration in the business environment for Brazilian beef processors, the agency said that Bracol's rating could be downgraded by more than one notch at the conclusion of the review.

SA Fábrica de Produtos Alimentícios Vigor's B2 rating, however, remain under review for possible upgrade, the agency noted.

"The rating action was primarily due to heightened challenges that Bracol will face in terms of: a) the company's operating performance in light of a significantly weaker outlook for Brazilian beef and leather exports; b) the company's exposure to increasingly expensive short-term trade finance credit; and, c) high working capitals needs and margin compression in its domestic beef segment," explained Moody's VP senior analyst, Soummo Mukherjee.

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