Brazilian Farming Group SLC Agricola Raises About US$101 Million in Rural Notes

BRAZIL · AGRIBUSINESS

Grain and cotton prices have turned. One of Brazil’s largest listed farmers spent the week collecting the benefit in both the debt and equity markets.

SLC Agricola approved a rural note issue on Friday. The total is about 515.5 million reais, roughly US$101 million.

The instrument is a cedula de produto rural with financial settlement. It is a Brazilian farm-sector security that settles in cash rather than in grain.

There are 515,480 notes at a nominal 1,000 reais each, about US$196. They are sold to professional investors only.

The Terms

The notes mature on 15 September 2033, seven years out. Principal is repaid in two equal instalments, the first in September 2031.

The headline rate is 95.5 percent of the accumulated interbank deposit rate. That is then swapped into dollar appreciation plus 6.15 percent a year.

The swap is the interesting part. A farmer selling soy and cotton earns in dollars, so dollar-linked debt matches the revenue.

Bradesco guarantees the issue in full and its investment bank is underwriting it. Proceeds go to production, commercialisation, processing, working capital and investment.

The Week Before It

On Wednesday 9 September JPMorgan raised its rating to overweight from neutral. It lifted its price target from 18 reais to 23, about US$3.54 to US$4.52.

The shares rose 7.72 percent that morning to 18.15 reais, roughly US$3.56. The bank named the company its top pick in the sector.

It preferred it to 3tentos, Sao Martinho and Adecoagro. Its argument was that Brazilian agribusiness is coming out of a three-year squeeze on margins and leverage.

The case rests on prices. Soybeans were up 13 percent on the month and 26 percent on the year.

Corn was up 16 percent on both measures. Cotton has gained 29 percent so far this year.

What the Shares Did

SLC Agricola shares were at 17.94 reais, about US$3.52, on Friday, down 2.66 percent on the day. Trade date: Friday 11 September 2026.

The weekly picture is the opposite. It gained 9.75 percent over the five sessions, the best performance on the Brazilian index.

Over twelve months it is up about 24 percent. The 52-week range runs from 12.62 reais to 19.32, roughly US$2.48 to US$3.79.

The Number That Argues the Other Way

First-quarter net income was 236 million reais, some US$46 million. That was down 53 percent on the same quarter a year earlier.

The broker case is therefore forward-looking. It depends on the combination of prices and costs holding through the coming harvest.

Two specifics were cited. The timing of fertiliser purchases and the company’s hedging book are both said to protect margins.

On the numbers used, the stock trades at about 5.9 times expected 2027 earnings before interest, tax, depreciation and amortisation. The free cash flow yield is put at 6.2 percent.

The Land Question

SLC Agricola farmland was revalued in June at 13.53 billion reais, roughly US$2.66 billion. That was an increase of just one percent.

The small move is the signal. Brazilian farmland values have flattened after years of rapid appreciation.

For a business that owns much of what it farms, that matters twice. It affects the balance sheet and it affects the cost of expanding.

Nothing new was announced on land or acquisitions this week. The 13.6 percent planted-area increase circulating online refers to the 2025 to 2026 season, not the coming one.

Why It Matters

Brazilian farming depends less on domestic interest rates than on the dollar and the weather. Both moved in its favour this week.

A dollar-linked seven-year note at these terms says lenders agree. So does a bank raising its target by almost a third.

The counterweight is a weak first quarter and a flat land market. The next results are the test of which reading is right.

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Frequently Asked Questions

What did SLC Agricola announce?

A rural note issue of 515,480 securities at 1,000 reais each, about 515.5 million reais or roughly US$101 million, approved on 11 September 2026.

What are the terms?

Maturity on 15 September 2033, principal in two equal instalments from September 2031, at 95.5 percent of the interbank rate swapped into dollar appreciation plus 6.15 percent.

Why did SLC Agricola shares move this week?

JPMorgan upgraded the stock to overweight on 9 September and raised its target to 23 reais, about US$4.52, citing higher soybean, corn and cotton prices.

How have the shares performed?

They ended the week at 17.94 reais, about US$3.52, up 9.75 percent over five sessions and roughly 24 percent over twelve months.

What is the risk?

First-quarter net income fell 53 percent to 236 million reais, some US$46 million, and the farmland portfolio rose only one percent in the June revaluation.

Sources: Money Times, BP Money, Brasil em Folhas, StatusInvest, InfoMoney, Investidor10.