Brazil Beef Sees Further Pressure

S&P has placed Bracol’s B+ long-term corporate credit rating on CreditWatch negative reflecting the recent deterioration of market and credit conditions for the beef sector in Brazil. “Bracol’s weakening credit metrics and the significant acquisition commitments it must pay throughout 2009 put downward pressure on the company’s credit profile,” says S&P credit analyst Flavia Bedran. Bracol’s adjusted total debt was $3.2bn as of Sept. 30, 2008. This follows Moody’s placement of the company’s Ba3 ratings on review for a possible downgrade, which could be of more than one notch. According to the Brazilian foreign commerce secretariat, Brazilian fresh beef export dropped 45% by volume and 68% in USD terms from September 2008 to January 2009, while cattle prices in Brazil only fell about 10% in the same period.