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Braskem S.A. and its senior unsecured debt were downgraded by a notch to BB+ from BBB- by S&P, making it a fallen angel. S&P also downgraded its subordinated debt to B+ from BB. The rating action reflects S&P expectations of Braskem’s weaker operating profitability due to uncertainties over global economic growth and petrochemical capacity additions. S&P now forecasts Braskem’s debt/EBITDA at 4.0-4.5x in 2024 and close to 4.0x in 2025, compared to its previous expectations of 3.0-3.5x in 2024 and below 3.0x in 2025. The company was downgraded to Ba2 by Moody’s in December last year. With this, now Braskem is rated in the high yield bucket (BB+ by Fitch and Ba2 by Moody’s) by all the three rating agencies.
Braskem’s dollar bonds continue to trade stable – its 7.25% 2033s trades at 93.1 cents on the dollar, yielding 8.35%.