The current rating reflects S&P's belief that JBS will successfully complete the Seara acquisition, which includes the extension of the duration of the debt assumed from Marfrig Alimentos SA, as well as the expectation that JBS will improve operations and cash flows from Seara, according to Flávia Bedran, primary credit analyst of S&P.
"The stable outlook reflects our view that JBS will gradually reduce leverage by improving cash flows in all business lines and lower debt as it generates positive free operating cash flows from 2014 onward," S&P said. "We also expect that the company will be successful in improving Seara's operating performance and sustaining adequate liquidity upon the refinancing and extension of the debt assumed with the acquisition."
S&P said the improved rating reflects the JBS's consolidation of its businesses and a stronger portfolio that includes Seara. The agency noted the success of the company's geographic and portfolio diversification. S&P said the agency expects JBS to successfully integrate Seara, based on its track record with other acquisitions.