2020-04-04 IFR Magazine

International Financing Review April 4 2020 89

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Braskem eyes drawing down

of US$1bn RCF

„ BRAZIL Petrochemicals company is one of several LatAm borrowers to withdraw loans

Petrochemicals company BRASKEM is evaluating

whether to draw down on its US$1bn revolving

credit facility.

The move to withdraw a portion or its entire

credit facility comes as companies shore up

their cash balances to withstand the economic

slowdown caused by the coronavirus pandemic.

Concerns over the respiratory virus have sent

financial markets into a frenzy over the past

month as many businesses have closed their

doors and ceased operations on government

orders, while people around the world are self-

isolating to limit the spread of the virus.

Braskem is evaluating the option to withdraw

its dollar-denominated credit facility, but no

decision was final yet, the company said.

The Brazilian company has also formed a crisis

committee to establish procedures for the health

of its staff and the continuity of operations,

Braskem said in a statement.

If Braskem were to draw down, it would join a host

of other companies globally that have drawn from

their credit lines in recent weeks as they too cope

with the devastating impact of the coronavirus.

Braskem raised its US$1bn revolving credit

facility in May 2018.

Braskem’s five-year facility pays 125bp over

Libor. If the company draws on more than 33% of

the revolver, but less than 66%, the margin will

increase by 15bp, but if it withdraws more than

66% of the facility, then the margin will increase

by 30bp.

ABN AMRO, BNP Paribas, Credit Agricole,

Citigroup, Santander and SMBC arranged the

transaction.

JOIN THE CLUB

Brazilian pulp and paper exporter SUZANO

has also drawn a US$500m standby credit

facility as it strengthens its liquidity to

mitigate the possible impact of the Covid-19

pandemic.

The five-year facility, which was arranged

in February 2019 through wholly owned

subsidiaries Suzano Austria GmbH and Suzano

Pulp and Paper Europe SA, pays a margin of

130bp over Libor.

The financing was provided by a club of Bank

of America, HSBC, Mizuho, Santander and

Scotiabank.

Mexican peer ORBIA, formerly known as

Mexichem, drew down US$1bn from its US$1.5bn

credit line.

Earlier this month, Brazil’s state-owned

oil producer PETROLEO BRASILEIRO also said it

had drawn on US$8bn in dollar-denominated

revolving loans and disbursed R$3.5bn

(US$672m) in local currency credit lines.

Brazilian miner VALE has also borrowed

US$5bn from two facilities, while Mexican baker

GRUPO BIMBO and Mexican media company

TELEVISA have also tapped existing revolving

credit lines.

Aaron Weinman

9 IFR Loans 2327 p 75 - XX.indd 89 03 / 04 / 2020 19 : 26 : 36