MBRF Global Foods Co. SA has decided to hold off on a potential junk-debt offering as a global bond selloff has sent borrowing costs soaring. The Brazilian meat producer, which was planning to sell notes maturing in seven or 10 years, opted to step back after calls with investors earlier this week, according to a person familiar with the matter. The transaction would have been its first US dollar high-yield debt offering in five years.
“Any potential fundraising is subject to prevailing market conditions,” an MBRF spokesperson said in an emailed response to questions from Bloomberg News. “The company will continue to assess the most appropriate timing for any potential access to the international markets.”
US Treasury yields briefly surged to their highest levels since 2002 on Thursday, extending a climb that has raised borrowing costs for companies looking to fund investments or refinance debt. Junk-rated US corporate bond returns logged their biggest monthly and quarterly losses since 2022 in the period ended Sept. 30. For MBRF, it’s a setback at a time when a downturn in its US beef operation and high interest rates are hampering efforts to reduce leverage.
Formerly known as Marfrig Global Foods, the firm founded by its chairman Marcos Molina has become a food behemoth after its acquisition of BRF SA, completed last year. Still, profits have been constrained by a severe cattle shortage and the rising cost of servicing its roughly 45 billion reais ($8.6 billion) of debt. The adverse market environment means the company is unlikely to be able to start deleveraging before 2027, Fitch Ratings said Monday.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing