Fitch lowers Globoaves

Fitch Ratings said it downgraded the long-term foreign- and local-currency issuer default ratings of Globoaves Sao Paulo Agroavicola Ltda. to B- from B, as well as the national scale rating to BB+(bra) from BBB(bra).

The outlook is stable.

The downgrades follow the company’s failure to place a $200 million five-year bond in the second half of 2014, which has triggered a negative rating action, Fitch said.

This bond was crucial for improving the company’s liquidity position and lengthening its debt structure, the agency said.

The ratings reflect the company’s operations in the volatile meat-protein business, which results in significant fluctuation in its earnings and cash-flow generation, Fitch said.

Globoaves has a long operational track record and a relatively large market position in the niche segment of fertilized eggs and day-old-chicken production, the agency said.

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