Braskem SA Makes Timely Dollar Bond Payment, Calms Investor Nerves
Braskem SA, one of the world's largest petrochemical manufacturers, has successfully paid the interest due on Monday for some of its dollar bonds. People familiar with the matter confirmed this development. The payment helps ease investor concerns while the company continues to review its overall debt structure. This review is happening during a prolonged downturn in the petrochemical industry.
Details of the Bond Payments
The Brazilian company made payments on its dollar bonds that are set to mature in the year 2028. Sources provided this information but asked not to be named because the details are not public. According to data compiled by Bloomberg, Braskem had approximately $64 million due for these 2028 notes. The same amount was also due for bonds maturing in 2031.
Braskem declined to offer any comment on the matter when approached.
Broader Debt Obligations and Financial Context
This month's financial obligations for Braskem include coupon payments on several other bonds. These bonds mature in 2030, 2050, and 2081. The notes due in 2081 are hybrid notes. They were among the biggest losers in the recent selloff that hit Braskem. Their indenture allows the company to defer interest payments without triggering a default event.
The petrochemical giant has faced significant challenges. It has struggled with depressed prices in the global petrochemicals market. Additionally, the company dealt with an environmental disaster at one of its salt mines. Data shows Braskem has $130 million in total debt payments due this month.
Financially, the firm reported having $1.3 billion in cash at the end of September. In October, Braskem tapped into a $1 billion credit facility to bolster its liquidity.
Credit Review and Ownership Developments
Last year, Braskem hired financial advisers to conduct a comprehensive review of its capital structure. Analysts at Fitch Ratings have expressed concerns. They flagged "heightened" refinancing risk and ongoing liquidity pressure for the company. Late last year, Fitch downgraded Braskem's credit score to CC, reflecting these increased risks.
Novonor SA, the troubled conglomerate that co-controls Braskem, is currently working on a deal. The plan involves selling its stake in Braskem to a fund. This fund is advised by the asset manager IG4 Capital.
In a related development, subsidiary Braskem Idesa SAPI announced on Monday that it failed to reach an agreement on a proposed restructuring plan. This adds another layer of complexity to the company's financial situation.
The payment on the dollar bonds represents a positive step for Braskem as it navigates a difficult period for the petrochemical sector.
