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Braskem’s Dollar Bonds Weaker after an Unexpected Lawsuit Filed by the Alagoas State
July 17, 2025
Braskem’s dollar bonds were weaker across the board after the Brazilian state of Alagoas filed a BRL 4bn ($717mn) lawsuit against them. This relates to an environmental disaster caused by the collapse of one of its mines. This legal action adds to the crisis in Maceió caused by the company, post which Braskem lost its IG rating in 2023. The new lawsuit was unexpected, with Braskem learning about it through the media. Analysts believe that it may further strain Braskem’s bonds that are already under pressure following fears of a takeover by distressed debt investor Nelson Tanure.
In late January, Braskem raised provisions related to the Alagoas disaster by BRL 1.3bn ($233mn). The company has already paid out BRL 4.22bn ($758mn) in compensation since the creation of its Financial Compensation and Relocation Support Program. Total provisions now stand at BRL 18bn ($3.23bn). While these costs are expected to be spread over a decade, the lawsuit is set to increase Braskem’s liabilities.
Braskem’s 4.5% 2030s were down nearly 2 points, currently trading at 74.3, yielding 12%.
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