Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>We maintain our Overweight on Minerva, favoring the 2033s for superior carry-to-duration despite limited upside, supported by strong liquidity, improving leverage, and integration-driven efficiencies</li>
<li>We see room for further spread compression over 9–12 months as operating conditions remain favorable, tariff mitigation continues, and synergies from acquired plants strengthen the credit profile</li>
<li>Relative value remains constructive, with Minerva notes still wide to key benchmarks and peers even after tightening, while rising cattle prices and weak interest coverage remain the main risks</li>
</ul>


We maintain our Overweight on Minerva, favoring the 2033s for superior carry-to-duration despite limited upside, supported by strong liquidity, improving leverage, and integration-driven efficiencies
We see room for further spread compression over 9–12 months as operating conditions remain favorable, tariff mitigation continues, and synergies from acquired plants strengthen the credit profile
Relative value remains constructive, with Minerva notes still wide to key benchmarks and peers even after tightening, while rising cattle prices and weak interest coverage remain the main risks


Minerva 3Q25: Stronger Credit as Integration Completes, Margins Under Pressure

<ul>
<li>Stronger post-acquisition scale, healthy FCF outlook, and export momentum reinforce the deleveraging path and outperformance case</li>
<li>We upgrade Minerva to Outperform, reflecting greater confidence in the company’s deleveraging trajectory, supported by expected cash generation despite integration costs and higher interest expenses.</li>
<li>Minerva reported strong 4Q24 results, with revenue up 26.0% QoQ and 73.8% YoY. Adjusted EBITDA rose 16.1% QoQ and 55.8% YoY, though the margin narrowed to 8.8%</li>
</ul>


Stronger post-acquisition scale, healthy FCF outlook, and export momentum reinforce the deleveraging path and outperformance case
We upgrade Minerva to Outperform, reflecting greater confidence in the company’s deleveraging trajectory, supported by expected cash generation despite integration costs and higher interest expenses.
Minerva reported strong 4Q24 results, with revenue up 26.0% QoQ and 73.8% YoY. Adjusted EBITDA rose 16.1% QoQ and 55.8% YoY, though the margin narrowed to 8.8%


Minerva 4Q24: Acquisition Outlook and Market Tailwinds Support Credit Upgrade

<ul>
<li>LatAm credit markets ended the week mixed as the LatAm Aggregate Index widened to 280 bps while EM spreads and U.S. yields remained stable.</li>
<li>In 2Q25 earnings, Vista, Minerva, and YPF delivered strong results supporting Overweight views, while Suzano, Cemex, and Telecom face spread constraints amid operational pressures.</li>
<li>MercadoLibre’s growth remains solid but limited spread compression, and Pemex benefits from government support.</li>
</ul>


LatAm credit markets ended the week mixed as the LatAm Aggregate Index widened to 280 bps while EM spreads and U.S. yields remained stable.
In 2Q25 earnings, Vista, Minerva, and YPF delivered strong results supporting Overweight views, while Suzano, Cemex, and Telecom face spread constraints amid operational pressures.
MercadoLibre’s growth remains solid but limited spread compression, and Pemex benefits from government support.


Weekly News & Views - 2Q25 Earnings Recap

<ul>
<li>U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage / MercadoLibre Achieves Full Investment Grade Status with S&amp;P Upgrade / Pemex Eyes US$8bn from Mixed Contracts</li>
<li>Initiating Coverage on Gerdau: IG Credit with US Exposure, Limited Spread Upside / Fitch Affirms Gerdau at BBB with Stable Outlook on Strong Fundamentals</li>
<li>Vista 2Q25: Results Reinforce Overweight, But Cash Burn and Liquidity Weaken Buffer / US Reinforces Argentina’s Appeal in YPF Expropriation Case</li>
</ul>


U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage / MercadoLibre Achieves Full Investment Grade Status with S&amp;P Upgrade / Pemex Eyes US$8bn from Mixed Contracts
Initiating Coverage on Gerdau: IG Credit with US Exposure, Limited Spread Upside / Fitch Affirms Gerdau at BBB with Stable Outlook on Strong Fundamentals
Vista 2Q25: Results Reinforce Overweight, But Cash Burn and Liquidity Weaken Buffer / US Reinforces Argentina’s Appeal in YPF Expropriation Case


<ul>
<li>Brazilian Credits in Our Coverage Show Resilience, as U.S. Tariffs Likely to Have a Modest Impact Despite Limited Macro Policy Flexibility</li>
<li>Suzano is most exposed to U.S. tariffs, but global scale, cost leadership, and FX tailwinds help cushion the impact. Gerdau could benefit from tighter U.S. supply conditions in the US. </li>
<li>CSN has just 4% U.S. exposure, with limited risk unless quotas tighten. Minerva’s 5% is manageable, supported by a diversified export base that enables flexible rerouting.</li>
</ul>


Brazilian Credits in Our Coverage Show Resilience, as U.S. Tariffs Likely to Have a Modest Impact Despite Limited Macro Policy Flexibility
Suzano is most exposed to U.S. tariffs, but global scale, cost leadership, and FX tailwinds help cushion the impact. Gerdau could benefit from tighter U.S. supply conditions in the US. 
CSN has just 4% U.S. exposure, with limited risk unless quotas tighten. Minerva’s 5% is manageable, supported by a diversified export base that enables flexible rerouting.


U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage

Brazil

Minerva S.A. provides meat products. The Company focuses on production and sale of fresh meat and its derivatives. Minerva serves clients worldwide.

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Minerva /Brazil (BEEF3 BZ)

Minerva 3Q25: Stronger Credit as Integration Completes, Margins Under Pressure

Maintaining Overweight on Minerva due to strong liquidity, improving leverage, and integration efficiencies, despite risks of rising cattle prices...

Leandro Gubler

Minerva 4Q24: Acquisition Outlook and Market Tailwinds Support Credit Upgrade

Minerva's post-acquisition scale, solid cash flow, and export strength support deleveraging and outperformance, prompting an upgrade to Outperform...

Leandro Gubler

Weekly News & Views - 2Q25 Earnings Recap

LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

Leandro Gubler

EM Spreads - Weekly News & Views

US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

Leandro Gubler

U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage

Brazilian companies like Suzano, Gerdau, CSN, and Minerva show resilience against U.S. tariffs, with limited impact due to global scale, cost...

Leandro Gubler

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Minerva 3Q25: Stronger Credit as Integration Completes, Margins Under Pressure

​Maintaining Overweight on Minerva due to strong liquidity, improving leverage, and integration efficiencies, despite risks of rising cattle prices...

Leandro Gubler

Minerva 4Q24: Acquisition Outlook and Market Tailwinds Support Credit Upgrade

Minerva's post-acquisition scale, solid cash flow, and export strength support deleveraging and outperformance, prompting an upgrade to Outperform...

Leandro Gubler

Weekly News & Views - 2Q25 Earnings Recap

​LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

Leandro Gubler

EM Spreads - Weekly News & Views

​US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

Leandro Gubler

U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage

​Brazilian companies like Suzano, Gerdau, CSN, and Minerva show resilience against U.S. tariffs, with limited impact due to global scale, cost...

Leandro Gubler

Maintaining Overweight on Minerva due to strong liquidity, improving leverage, and integration efficiencies, despite risks of rising cattle prices...

LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

Brazilian companies like Suzano, Gerdau, CSN, and Minerva show resilience against U.S. tariffs, with limited impact due to global scale, cost...