More debt buybacks a possibility for Brazil’s Marfrig: CEO
The Brazilian meat producer will consider liability management exercises in 2014, depending on the spreads on its existing bonds, says Sergio Rial
Brazil-based meat producer Marfrig could launch further debt
buyback or tender offers next year, depending on how its bonds
trade, its chief executive has told LatinFinance.
firm bought back just over half of its $375m 2016 bond in
September, funded through the sale of a new 2021 bond.
"The recent funding and tender for the 2016 was really aimed
at eliminating any important maturities for us between now and
2017," Sergio Rial, the chief executive, said. "I'm glad to
report that we have been able to accomplish that. We have no
important maturities in this period, which I think is
Marfrig is aiming to cut its leverage, and so it does not
plan to offer new debt, Rial said. The firm reported net debt
of 6.7 billion reais ($2.9 billion) at the end of the third
quarter, with an average cost of 7.8%.
"Our approach would be to continue to monitor the market to
seize any opportunity to reignite our liability management
process," he said. The company would want its spreads to
compress further before considering a new liability management
"We're trading, relative to some peers, 300 basis points
higher. At this point in time there should be no fundamental
reason for that. That will be a function of us continuing to
present better results," says Rial.
Marfrig reported a net loss, stripped of foreign exchange
variations and the cost of transferred debt, of 92.5 million
reais in the third quarter, although net revenues at the group
rose 15% year on year to 4.9 billion reias.