Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

EM Spreads is an independent credit research service specializing in Emerging Markets, primarily focusing on Latin American issuers.

Senior Credit Analyst - Emerging Markets

Minerva 1Q26: Bigger Platform, Same Cattle Cycle Pressure

Minerva 2Q26: Margin Pressure Persists, Cash Conversion Still the Test

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

Minerva: Balancing an Interesting Credit Story with Acquisition Risks

EM Spreads

Credit

<ul>
<li>Neutral Rating Downgrade: Valuation now reflects a completed integration and stabilized credit profile, with spread compression largely exhausted and yields trading inside the EM BB index and LatAm curves.</li>
<li>Margin Pressure Ahead: Rising cattle costs and domestic demand weakness in Brazil are expected to compress margins in 2026, offsetting revenue growth and keeping absolute EBITDA levels stagnant.</li>
<li>Balanced Risk-Reward: While deleveraging continues toward a 2.0x net debt target, current bond prices offer limited upside, making the positive convexity of the 2031 notes the preferred defensive exposure.</li>
</ul>


Neutral Rating Downgrade: Valuation now reflects a completed integration and stabilized credit profile, with spread compression largely exhausted and yields trading inside the EM BB index and LatAm curves.
Margin Pressure Ahead: Rising cattle costs and domestic demand weakness in Brazil are expected to compress margins in 2026, offsetting revenue growth and keeping absolute EBITDA levels stagnant.
Balanced Risk-Reward: While deleveraging continues toward a 2.0x net debt target, current bond prices offer limited upside, making the positive convexity of the 2031 notes the preferred defensive exposure.


Minerva 4Q25: Domestic Weakness and Cost Inflation Weigh on Profitability