Minerva Moves to Double-B Territory

Fitch has upgraded Minerva to BB minus from B+, it says, based on an improving credit profile and a strengthening in the Brazilian beef sector. The transaction agreed last month that gave Brasil Foods (BRF) a 15.2% stake in Minerva will increase the company’s processing capacity and lower its leverage. The consolidation process of the last few years has resulted in the creation of three large export players, which Fitch finds gives “more stability to the industry at the end of the positive cattle cycle in Brazil.” Minerva’s leverage was 3.4x during the 12 months through September, and the agency sees it dropping below 3.0x in the next two years. The outlook is stable. Minerva is rated B1/BB minus/BB minus.