Brazil-based Marfrig Global Foods has been upgraded by Fitch to BB+ from BB. Among the major reasons for Fitch’s upgrade is Marfrig’s strong operating performance, expected positive free cash flows and low net leverage. While lower profitability is expected from its US division for the rest of the year, strong demand for beef globally will likely drive international exports and profitability in its South America division. Fitch also considered that Marfrig is a significant stakeholder (33.27%) and has board control in BRF Global, a Brazilian food processing company with close to $2.9bn market cap. This places Marfrig in a favourable and robust business position even as both entities operate independently. Due to its size and geographic diversification, Marfrig will likely be able to mitigate various supply chain and seasonal challenges that crop up, allowing it to remain advantageously poised to compete in the global beef industry.
Marfrig’s 3.95% 2031s are currently trading 0.39 points lower at 74.2 cents on the dollar, yielding 8.34%.