Fitch upgrades Braskem

Fitch Ratings said it raised Braskem SA’s long-term foreign- and local-currency issuer default ratings to BBB- from BB+ and revised its outlook to stable from positive. Fitch has also affirmed Braskem's national scale rating at AAA(bra) with a stable outlook.

The upgrade reflects the material improvement Braskem made to its capital structure by paying down $1.7 billion of debt with excess cash flow generated during the top of the petrochemical cycle. The company's credit ratios should remain at or below 2.5x in the medium to long term despite an expected deterioration in spreads,” Fitch said in a press release.

“Fitch forecasts Braskem's net debt/EBITDA ratio to be between 1.9x and 2.4x during 2022-2023, excluding operations in Mexico, and 2.1x and 2.5x including it. Contingencies related to the geological event in Alagoas and its associated cash out flows remain sizeable but manageable,” the agency said.

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