Brazil’s BRF Sells $750 Million of Notes as S&P Outlook Positive

BRF SA, Brazil’s biggest food producer, sold $750 million of 10-year notes as Standard & Poor’s cited strong cash flow in revising the outlook on the company’s credit rating to positive.

The bonds attracted a yield 2.45 percentage points over U.S. Treasuries.

S&P said today in a report that an “assertive pricing strategy” has helped BRF to pass cost increases to consumers, offsetting volatility in grain prices. The rating company cited the potential for an upgrade if Sao Paulo-based BRF maintains cash flow and a steady level of debt as it pursues growth abroad through acquisitions. The outlook on BRF’s rating of BBB-, matching Brazil’s government at the lowest level of investment grade, was changed from stable.

“The company’s large export sales, strong domestic cash flows, low debt levels and adequate liquidity could support BRF’s rating above the sovereign’s,” S&P analysts Flavia Bedran and Luisa Vilhena said in the report

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