Emerging market bonds

9 October 2026, 14:42 UTC Chief Investment Office GWM Investment Research For investors outside of the US

Amaggi: M&A weighs on the outlook Emerging market bonds Author: Donald McLauchlan, Latin America Credit Strategist, CIO Americas, UBS Financial Services Inc. (UBS FS)

• Andre Maggi Participacoes S.A. (Amaggi) operates via subsidiaries in four core segments (agriculture, commodities, logistics and operations, and energy).

• On 2 July 2026, Amaggi announced the completion of its debt-financed acquisition of a 40% stake in FS Industria de Combustiveis Ltda (FS), one of the leading producers of ethanol in Brazil. In response, both Fitch and Moody's hit Amaggi with adverse rating actions. The former downgraded the credit from BB- to B+, with a stable outlook, and the latter revised the outlook for its Ba3 rating from stable to negative.

• In light of the FS transaction and its likely negative impact on Amaggi's credit metrics over the next 12- to 24 Source: Getty months, we downgrade our CIO credit outlook from Stable to Deteriorating. We also downgrade the Amaggi Figure 1 - Amaggi - Credit risk flags 5.25% bond due in 2028 (ISIN USL0183BAA90) from Fair to Expensive, as we expect valuations to remain under pressure until there is evidence that Amaggi's credit metrics have found a floor and are recovering. UBS, as of 8 October 2026

Company profile Fitch estimates that Amaggi financed the acquisition with Andre Maggi Participacoes S.A. (Amaggi) operates USD 700mn in new debt. In response, both Fitch and via subsidiaries in four core segments (agriculture, Moody's hit Amaggi with adverse rating actions. The former commodities, logistics, and energy). Amaggi Agro is focused downgraded the credit from BB- to B+, with a stable on the production of non-GMO (genetically modified outlook, and the latter revised the outlook for its Ba3 rating organisms) soybeans and GMO soybeans, corn and cotton, from stable to negative. and soybean seeds. Amaggi Commodities processes and sells grains, in addition to importing and marketing In-line 1H26 agricultural inputs and mixing fertilizers. Amaggi Logistics Amaggi posted 1H26 results in line with expectations, and Operations owns and operates—either directly or in our view. Net revenues and EBITDA grew 16.8% and through joint ventures (JVs)—a river fleet, port terminals, 25.9% year over year, respectively, and the semi-annual and a truck fleet for road transportation. Amaggi Energy EBITDA margin widened 60bps from 6.6% in 1H25 to sells energy derived from hydroelectric sources. 7.2% in 1H26. Half over half, net revenues and EBITDA increased 28.8% and 36.0%, respectively, and the semi- The FS Industria de Combustiveis Ltda deal annual EBITDA margin expanded 40bps versus 6.8% in On 2 July 2026, Amaggi announced the completion of its 2H25. debt-financed acquisition of a 40% stake in FS Industria de Combustiveis Ltda (FS), one of the leading producers of Net leverage (total debt, minus cash, minus readily ethanol in Brazil. The transaction includes a USD 100mn marketable inventories, divided by 12-month trailing investment in FS through the primary issuance of shares EBITDA) as of 30 June 2026 came in at 2.5x—down from and provides for the acquisition of stakes owned by 2.8x in December 2025 and 3.4x in December 2024, and existing shareholders of FS. Although the total value of well inside the company's 3.3x medium-term target. the transaction has not been disclosed, rating agency

This report has been prepared by UBS Financial Services Inc. (UBS FS). Analyst certification and required disclosures begin on page 6.

Emerging market bonds: For investors outside of the US

In terms of liquidity and refinancing risk, as of 30 June 2026, Amaggi reported over USD 1.4bn in cash and cash Risk factors equivalents, approximately USD 1.1bn in readily marketable Risk factors for Amaggi include exposure to epidemics, inventories (RMI), USD 847mn in short-term debt (a good diseases, and plagues, as well as volatility in agricultural portion of which consists of renewable export financing commodity and energy prices, changes in weather facilities), and approximately USD 266mn in gross annual conditions, a highly…