By Brazil Stock Guide – Braskem S.A. (B3: BRKM3, BRKM5; NYSE: BAK) said it remains focused on resilience initiatives to offset the prolonged petrochemical downturn and strengthen the competitiveness of Brazil’s chemical industry. The statement came Friday (Sept. 19, 2025), after S&P Global Ratings downgraded the company’s global rating to B+ from BB-, with a negative outlook.
S&P said cost-cutting efforts, working-capital improvements and potential asset sales may not be enough to reverse cash burn in the coming quarters. The agency forecasts net debt-to-EBITDA above 7x and funds from operations to debt below 7% through 2026 — metrics no longer consistent with a BB- profile.
S&P also lowered Braskem’s ratings on senior unsecured notes to B+ (from BB-) and on subordinated notes to CCC+ (from B-). All instruments were removed from CreditWatch negative, where they had been placed in August.
In Mexico, subsidiary Braskem Idesa S.A.P.I. hired restructuring advisers, prompting S&P to cut its rating to CCC/Watch Neg, while Fitch had already lowered it to CCC+. Although Idesa’s debt is non-recourse, S&P warned that a potential distressed restructuring could further limit Braskem’s financial flexibility.
The downgrade also reflects weak petrochemical spreads and global oversupply. Relief could come from anti-dumping duties on U.S. and Canadian polyethylene imports and tax-relief measures under debate in Brazil’s Congress, including the REIQ and the proposed PRESIQ. Still, leverage would need to fall below 6x by 2026 to support a stable outlook.
The negative outlook signals another potential downgrade within six months if Braskem fails to improve cash flow.