Braskem Finance Limited: An Overview

Braskem Finance Limited is a wholly-owned subsidiary of Braskem S.A., the largest thermoplastic resin producer in the Americas. Primarily functioning as a financing arm for its parent company, Braskem Finance Limited facilitates access to international capital markets to support Braskem S.A.'s growth strategy and ongoing operations.

The primary function of Braskem Finance Limited is to issue debt instruments, such as bonds, in the international market. These bonds are typically guaranteed by Braskem S.A., meaning Braskem S.A. takes responsibility for repaying the debt if Braskem Finance Limited is unable to. This guarantee is a critical factor that influences the credit rating and ultimately, the terms and interest rates associated with the bonds. By accessing the international markets, Braskem Finance Limited can often secure more favorable financing terms than might be available solely within the Brazilian domestic market.

The funds raised through Braskem Finance Limited are used for a variety of purposes, including:

• Funding Capital Expenditures: Supporting investments in new production facilities, technological upgrades, and expansions of existing operations.
• Refinancing Existing Debt: Replacing older, potentially higher-cost debt with new debt at more favorable terms. This can improve Braskem S.A.'s overall financial health.
• Supporting Working Capital Needs: Ensuring sufficient liquidity to manage day-to-day operations, including purchasing raw materials and covering operational expenses.
• Strategic Acquisitions and Investments: Funding strategic acquisitions and investments that align with Braskem S.A.'s long-term growth plans.

As a conduit for international financing, Braskem Finance Limited's performance is inherently tied to the creditworthiness and financial performance of Braskem S.A. Credit rating agencies assess the guaranteed debt issued by Braskem Finance Limited based largely on the underlying credit profile of Braskem S.A. Therefore, factors that affect Braskem S.A.'s profitability, such as commodity prices, raw material costs, and macroeconomic conditions in Brazil and globally, also impact the perceived risk associated with Braskem Finance Limited's debt.

Investors considering bonds issued by Braskem Finance Limited closely scrutinize Braskem S.A.'s financial statements, strategic direction, and risk management practices. They also analyze the broader economic environment and the competitive landscape within the petrochemical industry. The strength of the guarantee provided by Braskem S.A. is a key consideration in their investment decisions.

In conclusion, Braskem Finance Limited plays a crucial role in enabling Braskem S.A. to access international capital markets, thereby supporting its growth and development. Its success is directly linked to the financial health and strategic execution of its parent company, Braskem S.A.