JBS USA Lux S.A. Announces Offering Of Senior Notes

Fitch Assigns 'BBB-' Issuance Ratings to JBS Finance Luxembourg S.a.r.l and JBS USA Lux S.A.



JBS USA Lux S.A. Announces Offering Of Senior Notes


Source: JBS USA Lux S.A.

via PRNewswire - Nov 16, 2021


GREELEY, Colo., Nov. 16, 2021 /PRNewswire/ -- JBS USA Lux S.A. ("JBS USA") today announced that it has commenced a private offering of sustainability-linked senior notes due 2032 (the "Notes"). JBS USA and its wholly-owned subsidiaries, JBS USA Food Company and JBS USA Finance, Inc., will be co-issuers of the Notes. JBS S.A. ("JBS"), certain other direct and indirect parent companies of JBS USA and each of JBS USA's wholly-owned U.S. restricted subsidiaries that guarantee JBS USA's secured term loans will guarantee the Notes.


JBS USA intends to use the net proceeds from the offering of the Notes, together with cash on hand, to fund the redemption of the outstanding $1.0 billion aggregate principal amount of JBS USA Food Company's 7.000% Senior Notes due 2026 (the "2026 Notes").


This press release is neither an offer to purchase nor a solicitation of an offer to sell or buy the Notes. There shall not be any sale of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. This press release does not constitute a notice of redemption for purposes of the redemption provisions contained in the indenture governing the 2026 Notes.


The Notes and the guarantees will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, any U.S. persons (as defined in Regulation S of the Securities Act) absent registration under the Securities Act, or pursuant to an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. The Notes will be offered only to "qualified institutional buyers" under Rule 144A of the Securities Act or, outside the United States, to persons other than "U.S. persons" in compliance with Regulation S.


Important Notice Regarding Forward-Looking Statements


This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Statements that are not historical facts, including statements about JBS USA's perspectives and expectations, are forward-looking statements. The words "expect," "believe," "estimate," "intend," "plan" and similar expressions, when related to JBS USA and its subsidiaries and affiliates, indicate forward-looking statements. These statements reflect the current view of management and are subject to various risks and uncertainties. These statements are based on various assumptions and factors, including general economic, market, industry and operational factors. Any changes to these assumptions or factors may lead to practical results different from current expectations. Forward-looking statements relate only to the date they were made and JBS USA undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date they were made.




JBS USA is one of the world's largest producers of beef, pork, chicken and packaged food products. In terms of daily production capacity, JBS USA is among the leading beef producers and the second-largest pork and chicken producer in the United States. In Australia, JBS USA is the leading producer of beef, lamb and packaged foods. JBS USA prepares, packages and delivers fresh, value-added and branded beef, pork, chicken, and lamb products to customers in more than 120 countries on six continents. JBS USA is an indirect, wholly-owned subsidiary of JBS, the largest protein company and the largest food company in the world in terms of net revenue.




Diego Pirani


[email protected]

+1 (970) 506-8117




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Fitch Assigns 'BBB-' Issuance Ratings to JBS Finance Luxembourg S.a.r.l and JBS USA Lux S.A.


Source: Fitch Ratings

16 Nov, 2021


Fitch Ratings - New York - 16 Nov 2021: Fitch Ratings has assigned a 'BBB-' to JBS Finance Luxembourg S.a.r.l.'s new USD1 billion senior unsecured notes due in 2027, which is guaranteed by JBS S.A. Fitch also assigned a 'BBB-' to the new USD1billion senior unsecured sustainability-linked notes issued by JBS USA Lux S.A. and co-issuers JBS USA Finance, Inc. and JBS USA Food Company. The notes are also guaranteed by JBS S.A. Proceeds of the notes are for debt repayment and general corporate purposes.


For the sustainability-linked bond, the company has set up a performance target to reduce its Global Greenhouse Gas Emissions Intensity by 20.30% by Dec. 31, 2026, based on linear annual improvements against the 2019 baseline year, that will result in a 30% reduction by the end of 2030, subject to certain exclusions related to significant acquisitions and changes in laws and regulations.


Key Rating Drivers


Strong Financial Profile: Fitch expects JBS's net leverage to remain below 2.0x in 2021 (1.7x including IFRS16 adjustments at YE 2020), driven by sales and EBITDA growth, primarily as a result of the strong performance of its U.S. beef operations. JBS's fundamentals are further supported by strong overall demand for protein, notably from Asia, high beef prices, the reopening of its foodservice segment and overall economic recovery. These positive fundamentals are somewhat tempered by high feed and cattle costs in Brazil and higher labor costs in the U.S.


Strong Parent Linkage: JBS USA's parent and subsidiary rating linkage with JBS S.A. (BBB-) is assessed as strong due to legal, operational and strategic ties. JBS USA is indirectly fully-owned by JBS and represents a majority of its consolidated revenues. JBS USA's bonds are guaranteed by the parent company, there are cross-default clauses, and the bonds are pari-passu. JBS USA can transfer funds to JBS S.A. through intercompany loans, and the parent maintains control over JBS USA's business and financial strategies.


Acquisition Appetite: Fitch expects JBS to pursue bolt-on acquisitions aimed at increasing its portfolio of more value-added products. The company has announced several acquisitions since 2020 for a total amount of about BRL19.3 billion. Any potential acquisition would not be expected to increase net leverage much more than 2.5x in 2021 given the relative size of the company.


Strong Business Profile: JBS's business profile is strong due to its position as the world's largest beef, poultry and leather producer with further diversification added by pork and prepared foods. The company is geographically diversified with a strong presence in North America, South America, Australia and Europe. This geographic and product diversification enables the group to mitigate cattle cycles, import restrictions and sanitary risk. The group is engaged in several environmental initiatives in Brazil involving carbon emission and cattle traceability. JBS's Brazil Beef represented 6% of LTM EBITDA of 3Q21. Exports represented 27% of JBS's global sales as of 3Q21. Greater China represented about 28.1% of export sales.


Governance Issues Remain: JBS S.A. and JBS USA Lux S.A. have an ESG Relevance score of '5' for Governance Structure for ownership concentration. JBS's ratings remain constrained by its corporate governance structure and ownership concentration with its main shareholder (J&FInvestimentos S.A.), which owns 38% of the company's shares. Governance issues have a negative rating impact, as the company's overall standalone rating business profile and financial profile is consistent with the 'BBB' rating level, given JBS's size, diversification, low leverage and FCF generation ability compared with other international peers, such as Tyson Foods, Inc. (BBB/Stable).


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