S&P lifts JBS USA secured debt from junk

S&P said it affirmed its BB global scale corporate credit ratings on JBS and JBS USA Lux SA and the brAA- national scale corporate credit rating on JBS.

S&P also affirmed the BB senior unsecured ratings on JBS and JBS USA.

In addition, S&P raised the senior secured debt ratings on JBS USA to BBB- from BB and revised the recovery rating on this debt to 1, reflecting a very high (90%-100%) recovery, from 3. Moreover, S&P revised the recovery rating on JBS USA's unsecured debt to 3, reflecting a meaningful (50%-70%; the lower band of the range) recovery, from 4.

Finally, S&P kept the recovery rating on JBS’ unsecured debt at 4, reflecting an average (30%-50%; now in the lower band of the range) recovery, unchanged.

The issue-level rating on JBS USA's secured debt (comprising of term loans) follows S&P’s revised approach to the value of the collateral package in a default scenario under an EBITDA multiple valuation approach, which S&P believes better reflects the characteristics of such a scenario.

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