Fitch rates Braskem bonds BB-

Fitch Ratings said it assigned a BB- rating to Brazil-based Braskem SA's proposed $200 million senior unsecured perpetual bonds. The outlook for Braskem's BB- foreign currency rating is positive and stable for all other ratings.

Proceeds of the offering are expected to be used to fund the acquisition of the remaining 65% of Politeno Indústria e Comércio SA that the company does not own and for general corporate purposes. The agency said the acquisition of Politeno is positive but should not materially affect Braskem's credit profile.

Fitch said Braskem's ratings reflect the company's solid credit profile, supported by a strong and sustained operational cash flow, low leverage, a long-term debt profile and a strong liquidity position. Braskem also benefits from its leadership position in the petrochemical industry in Latin America and Brazil.

The ratings are challenged by greater pressures on margins due to the increase in the price of naphtha, appreciation of the Brazilian real against the dollar and potential increases in the price of oil. Debt to EBITDA for 2005 was 2.4x.

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