S&P gives Braskem Idera negative view

S&P said it affirmed Braskem Idesa Sapi’s B ratings, removed them from CreditWatch with negative implications and assigned a negative outlook. The ratings were placed on CreditWatch on Dec. 4. The recovery rating on the senior secured notes remains unchanged at 3 indicating a meaningful recovery (50%-90%) in default.

On March 1, 2021, the company announced it signed a memorandum of understanding with Pemex to continue discussing the potential amendments to their ethane supply contract and for the development of an ethane import terminal, subject to negotiation, entering final documentation, and approvals of Braskem Idesa's shareholders and creditors.

“The negative outlook reflects our view that Braskem Idesa's operating and financial performance is still dependent on the continuity of ethane supply, and consequently, the completion of negotiations with Pemex. The negative outlook also reflects our view that Braskem Idesa's deleveraging could take longer than previously expected if the company doesn't reach the estimated polyethylene output level, denting EBITDA,” S&P said in a press release.

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