Fitch downgrades Braskem Idesa

Fitch Ratings said it downgraded Braskem Idesa, SAPI’s long-term foreign- and local-currency issuer default ratings to B+ from BB-. Fitch also downgraded Braskem Idesa’s senior secured note to B+ from BB-. Fitch assigned the recovery rating of RR4 for the secured notes. The agency placed all the ratings on rating watch negative.

“Braskem Idesa’s downgrade follows the shutdown of its sole petrochemical operation (Ethylene XXI) in Mexico. The halting of operations is due to the Mexican government-controlled gas pipeline operator, Centro Nacional de Control del Gas Natural’s (Cenagas), decision to terminate natural gas transportation services,” Fitch said in a press release.

Natural gas is used as fuel in the ethylene production process, and Fitch said it expects the company will find another supplier.

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