MBRF postpones dollar bond issue as borrowing costs surge

Brazilian meat producer MBRF decided to postpone a potential high-yield bond sale after a global debt selloff sharply increased borrowing costs. The company had planned to issue bonds maturing in seven or ten years, which would have marked its first US dollar high-yield issuance in five years, according to a person familiar with the matter who spoke to Bloomberg News.

The decision came after discussions with investors earlier this week. In an emailed response to Bloomberg News, an MBRF spokesperson stated that any fundraising depends on prevailing market conditions, and added that the company will continue to evaluate the best timing to access international debt markets.

The delay occurs against a difficult backdrop for corporate debt. US Treasury yields briefly touched their highest levels since 2002 on October 1, 2026. Returns on US high-yield corporate bonds also posted their steepest monthly and quarterly declines since 2022 during the period ending September 30.

The postponement complicates MBRF's efforts to trim its debt pile of approximately BRL 45 billion. The company, formerly known as Marfrig and founded by Chairman Marcos Molina, expanded into a food giant spanning poultry, pork, frozen pizzas, and lasagna after finalizing its acquisition of BRF last year. Profitability remains pressured by a severe cattle shortage affecting its US beef division, its largest unit.

In the second quarter, interest expenses rose about 20% year-on-year, consuming roughly three-quarters of the meat producer's operating cash flow, according to its financial statements. Net debt reached roughly 3.4 times earnings before interest, taxes, and other items in the three months through June. Fitch Ratings noted on September 28, 2026, that tough market conditions and export restrictions to China make deleveraging unlikely before 2027. Earlier this week, MBRF also announced an offer to buy back a bond maturing in 2029.