Flash Report /
Brazil

Brazil: JBS's new term loan

    Rafael Elias
    Rafael Elias

    Director, Latin America Credit

    Tellimer Research
    3 May 2019
    Published by

    As we discussed in a previous report, Brazil's JBS, S.A., has continued with its balance sheet management strategy by extending its maturities and lowering its cost of debt.

    On 2 May, the company announced that its subsidiary JBS USA Lux, S.A. raised US$1.9bn through a senior secured term loan that the company labeled as "Term Loan B Facility", due 1 May 2026 and paying an interest rate of LIBOR + 250bps.

    The proceeds from this loan, along with new bond issues this month, will be used to retire an outstanding US$2.9bn that was due 2022.

    We have a Buy recommendation on the JBS family of bonds and believe that the company has a positive business outlook , that it has proven to be resilient to corruption scandals and that it continues to have ample access to the capital markets and the loans market.