US HY Investors Hunger for JBS

Brazilian beef producer JBS is set to price today a 2014 bond through its US units, to yield in the area of 13%. Bankers managing the sale say the book was approaching $1bn in size late Tuesday, and could be upsized from a targeted $400m. Some $300m in orders were contingent on the Brazilian meatpacker accepting a 3x total net leverage covenant – rather than the standard interest coverage covenant more common to the US high-yield market – which it agreed to Tuesday. More than 95% of the issue is expected to go to US high-yield investors, with a small number of EM accounts also participating, says a person on the deal. The bonds are guaranteed by the issuing US units, JBS USA and JBS USA Finance, and also the JBS SA parent. JPMorgan and Bank of America are managing the sale, rated B1.