S&P Raises Braskem

S&P has upgraded Brazil-based petrochemical company Braskem to BB+ (stable) from BB and taken it off CreditWatch. The rating action reflects Braskem’s improved business profile, resulting from both the acquisition of the control of strategic assets in the Triunfo Petrochemical Complex and a recently announced pact with Petrobras. S&P also notes Braskem’s leading market position in Brazil, pointing toward margin improvement and reduction in credit measures volatility in the future. Constraints include exposure to volatile input costs (mainly naphtha), as well as to working capital swings; reliance on the home market for EBITDA and increasing competition from large local players.