Fitch rates JBS loan BB

Fitch Ratings said it affirmed JBS SA's foreign-currency issuer default rating at BB-, local-currency issuer default rating at BB-, notes due 2016 at BB- and national-scale rating at A- (bra).

Fitch assigned BB- local-currency and foreign-currency issuer default ratings to JBS USA, LLC and affirmed the BB- rating on its notes due 2014. Fitch also assigned local- and foreign-currency issuer default ratings of BB- to JBS Finance II Ltd. and affirmed the BB- rating on its 2018 notes.

The outlooks are stable.

Fitch assigned a BB rating to JBS USA's proposed $400 million term loan B facility due 2018, reflecting above average recovery expectations in the event of a default by JBS USA.

JBS' ratings reflect its strong business profile as the world's largest beef and lamb producer and second largest chicken producer as well as the company's geographic and product diversity, which partially mitigates the risks of trade barriers and animal diseases, the agency said.

JBS' risk profile is above average due to cyclical risks associated with the meat business and the company's aggressive attitude toward growth through acquisitions, the agency added. While the company's credit profile should benefit from the continued integrations and turnaround of recent acquisitions, its cash flows and margins will continue to be pressured by the high cattle prices and the elevated grain prices.

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