Pilgrim’s Pride Corp’s new bond: a cow in chicken’s clothing

PPC’s existing SLB targets Scope 1+2 emissions intensity, and the company appears to have already met its 2030 target. But Scope 3 represents 92% of PPC’s total reported emissions, and land-use change from its soy supply chain is excluded from reporting entirely. Both PPC and JBS have recently dropped their net-zero 2040 targets.

If the takeover completes, the implications for bondholders could be material. PPC currently scores significantly higher than JBS on S&P’s ESG Rank, and its unrated status on MSCI may allow inclusion in indices that exclude JBS outright. Consolidation could trigger exclusion from data-driven mandates and ESG indices, reducing investor demand for the bonds.

A substitution clause in existing PPC bond documentation suggests JBS could be substituted as issuer without bondholder consent. European investors in the new bond should scrutinise whether equivalent language appears in the upcoming prospectus.

About the authors

Josephine Richardson

Managing Director, Head of Research

Based in London, Jo leads AFII’s research and a global team supporting fixed income investors as they align their portfolios with climate and sustainability goals. She joined AFII after 18 years in fixed income markets at JPMorgan.

Prahalad Prasad

Associate Director, Research

Based in London, Praha covers topics including but not limited to the just transition, sustainability-linked bonds and deforestation. He previously spent seven years in Lloyds Bank’s Debt Capital Markets team.