Moody’s upgrades JBS, debt

Moody's Investors Service said it upgraded JBS SA's corporate family rating and the ratings of the notes issued by Bertin SA and JBS Finance II and guaranteed by JBS to Ba2.

At the same time, the agency upgraded JBS USA, LLC's senior unsecured ratings to Ba2 and senior secured ratings to Ba1.

The outlook is stable.

Moody’s said the upgrade reflects primarily the improvement observed in JBS' credit metrics resulted from the strong performance of key business segments and the rapid, profitable expansion into the processed food business in Brazil, which has already contributed higher margins and will allow for a more stable cash generation going forward.

Accordingly, adjusted leverage declined to 3.8 times at the end of 2014 from 5 times at the end of 2013. Assuming no major acquisitions in the near-term, as has been publicly pledged by the company, and stronger cash generation, the agency estimates that normalized gross leverage could reach 3.5 times in 2015.

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