Moody’s Ratings upgraded Brazilian meat producer JBS to Ba1 from Ba2. The rating agency cited better results, improved liquidity and lower refinancing risk as JBS “implemented a number of initiatives to extend debt maturities, amortize debt and reduce funding costs, supported by clear financial policies for minimum cash requirement and leverage”. JBS as a result lowered its leverage target to 2-3x net debt to EBITDA, which typically rises to 3.75x EBITDA during periods of expansion.  Moody’s expected JBS to further strengthen its business profile, credit metrics and liquidity whilst “corporate governance concerns” still weigh on JBS’ ratings, as the company’s financial report of the third quarter 2020 was investigated for alleged irregularities. The company reported cash of BRL 19.7bn ($3.54bn) at the end of 2020 and around BRL 10bn ($1.78bn) in revolving credit lines and buffered liquidity with “comfortable debt amortization schedule” as noted by Moody’s.

JBS bonds were stable to down, its 7% 2026s down .06 to 106.675, yielding 2.64% and its 5.75% 2028s down .01 to 106.05, yielding 3.07%.

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