S&P raises Braskem-Idesa’s rating after deal with Pemex

FILE PHOTO: The logo of Mexican state oil company Pemex is pictured at a gas station in Ciudad Juarez
FILE PHOTO: The logo of Mexican state oil company Petroleos Mexicanos (Pemex) is pictured at a gas station in Ciudad Juarez, Mexico February 27, 2020. REUTERS/Jose Luis Gonzalez/File Photo

September 30, 2021

MEXICO CITY (Reuters) -Global ratings agency Standard & Poor’s (S&P) said on Thursday it raised Braskem-Idesa’s credit rating from “B” to “B+” citing better performance and deleveraging after the firm reached an ethane gas supply agreement with Mexican state oil company Pemex.

On Tuesday, Brazilian petrochemical firm Braskem said its Mexican subsidiary Braskem-Idesa had reached a new gas supply accord with Pemex to settle differences between the companies and build a $400 million ethane terminal.

The deal settles a long-running conflict between the companies, as Mexico’s government weighed canceling the Pemex ethane supply contract with Braskem-Idesa last year due to its high costs.

The deal “lessened previous operational and financial concerns,” S&P said in a statement on Thursday.

“Therefore, on September 30, 2021, S&P Global Ratings raised its global scale issuer and issuer credit ratings to ‘B+’ from Braskem-Idesa’s ‘B’,” S&P said.

Strong demand for products, along with favorable polyethylene price momentum, will continue over the next 12-18 months and support Braskem-Idesa’s gross revenue growth and profitability, S&P added.

(Reporting by Diego Ore, writing by Laura Gottesdiener; Editing by Aurora Ellis)