JBS pays off loans

JBS pays off loans

Loans Debt Corporate & Sovereign Strategy Brazil

Brazil's JBS said it has paid off BRL2.7bn ($707m) in bank loans as part of a program to reduce debt and extend average payment terms to six years.

The meatpacking company said in May that it intended to prepay $400m in loans, but it decided to use extra cash on hand to increase the amount by $300m. JBS added that it still owes BRL6.3bn to Banco do Brasil, Bank of China, Bradesco and Santander.

JBS has reopened existing bonds for $1.2bn so far this year, using the money to pay off loans and buy back old notes. The company's net debt equaled 3.2x EBITDA at at the end of the first quarter this year, according to Fitch Ratings, but it aims to lower the ratio to 2.5x by the end of the fiscal year.

JBS is the largest meat producer in the world, but it could face a new rival if BRF and Marfrig reach an agreement on a possible merger.

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