The consolidation positions MBRF as a powerful rival to JBS, Brazil’s largest meat company. It also offers fixed income investors an opportunity to influence anti-deforestation efforts across the sector.
Unlike its peers JBS and Minerva, which only target “zero illegal deforestation,” both Marfrig and BRF have made stronger commitments to eliminating deforestation entirely from their supply chains. The merger therefore gives investors an opening to engage the new entity on its sustainability performance, particularly if it looks to return to the market to refinance.
In this note, we examine the deforestation risk profiles of Marfrig, BRF, and their competitors and explore how bondholders can use upcoming primary market activity to demand more transparent reporting and ambitious supply chain monitoring.
We also identify Saudi Public Investment Fund (PIF), a minority investor in MBRF, as a potentially surprising but powerful actor in this space. The fund’s deep exposure to agriculture and status as a prolific green bond issuer could incentivize it to exert pressure to reduce deforestation across its portfolio.
