JBS bonds near historic lows after chairman charged
By Paul Kilby
NEW YORK, Jan 27 (IFR) - Bonds issued by Brazilian meat producer JBS were scraping historic lows on Wednesday following news that prosecutors had charged its chairman with crimes against the financial system.
Prices on the JBS SA 7.25% 2024s were being quoted at around 81.00 cents on the dollar, an all-time low and close to a seven point drop since Monday.
Bonds issued by the company's US entity were also breaking support levels, with its 7.25% June 2021s quoted at 91.05, near lows reached in June 2012, according to Thomson Reuters data.
Allegations that controlling shareholder J&F Investimentos violated loan laws have unnerved investors already concerned about widening corruption investigations that have led to the arrest of some of Brazil's top executives.
J&F said neither JBS nor any of its executives were named in the lawsuit, according to Reuters News. J&F said those charged were confident they would prove their innocence.
"This always triggers concerns and makes it more difficult for companies to fund themselves in the local and international markets," said a Sao Paulo-based banker.
"(But) JBS is very diversified in terms of funding, so I don't see any liquidity concerns."
Neither JBS SA nor JBS USA faces any significant maturity humps in the bond market until 2020, when about US$1.7bn in securities mature, according to Thomson Reuters data. Continuación...