Braskem Bonds Raised on Signs Sale Will Plow Ahead, Lucror Says

Published 20 December 2023, 12:31:04.990 GMT

(Bloomberg) -- Lucror Analytics revised its trade recommendation on Braskem’s bonds citing lower risks of the Brazilian petrochemical firm’s sale process falling apart after the collapse of its salt mine in Alagoas state, analyst Filipe Botelho writes in note.

* Executives from Braskem and Adnoc are scheduling meetings to move forward with the sale, according to local newspaper Estado, while Reuters reported the Brazilian government could increase its Braskem stake if that’s needed for the deal to be completed

* The recent developments “mitigate the risk” that the deal could fall through

** “The potential acquisition of Novonor’s stake by Adnoc is shaping up to be the most important catalyst for the bonds to rebound,” Botelho says

** The credit bias is negative as petrochemical spreads could take until the end of 2024 to recover, while Alagoas-related liabilities could continue to dent cash flow

* NOTE: Braskem’s dollar notes due 2030 fell about 10 cents to 75 cents since late November, when the sinking some neighborhoods in the city of Maceio accelerated

By Vinicius Andrade