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EM LATAM CREDIT: NEW ISSUE: JBS USA Holding Co. (JBSSBZ;Baa3/BBB-/BBB-)

EM LATAM CREDIT
Bullet

 

  • Brazil based parent company JBS SA is a large and very well diversified meat processor issuing new 10 and 30 year bonds from their US subsidiary with IPTs T+165/195 for 10Y/30Y, we see fair value T+150/180.
  • Pickup of almost 40 bps vs slightly higher rated rated Tyson Foods (TSN; Baa2neg/BBB/BBB) so new issue may look interesting for US high grade buyers or those looking for consumer products exposure. 

  • For comps in the dedicated EM space of Brazil names, you can look at Brazilian paper manufacturer Suzano (SUZANO; Baa3pos/BBB-/BBB-) that trades about 30bps wider in z spread to JBS or iron ore processor Vale (VALEBZ; Baa2pos/BBB-/BBBpos) that trades about 8 bps wider. Within the protein space but with high yield ratings you have Marfrig (Ba2/BB+/BB+) offering a 140 bps pickup to JBS for similar risk but less geographically diversified.

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  • Brazil based parent company JBS SA is a large and very well diversified meat processor issuing new 10 and 30 year bonds from their US subsidiary with IPTs T+165/195 for 10Y/30Y, we see fair value T+150/180.
  • Pickup of almost 40 bps vs slightly higher rated rated Tyson Foods (TSN; Baa2neg/BBB/BBB) so new issue may look interesting for US high grade buyers or those looking for consumer products exposure. 

  • For comps in the dedicated EM space of Brazil names, you can look at Brazilian paper manufacturer Suzano (SUZANO; Baa3pos/BBB-/BBB-) that trades about 30bps wider in z spread to JBS or iron ore processor Vale (VALEBZ; Baa2pos/BBB-/BBBpos) that trades about 8 bps wider. Within the protein space but with high yield ratings you have Marfrig (Ba2/BB+/BB+) offering a 140 bps pickup to JBS for similar risk but less geographically diversified.

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