It has been revealed that the Latin America's largest chemical company secured a five-year, $725 million loans assured by future exports to refinance credits helps to buy a part of the Ipiranga oil and petrochemicals group.
According to a statement, Braskem will pay the London interbank offered rate plus 1.75 percentage points a year, the company said in a statement to Brazil's securities and exchange regulator. In the first six months, the secured loans will use a different base rate of 5.016 percent, locking in a rate of 6.766 percent.
The secured loans were made by 19 banks led by Celyon, Citigroup Inc. and Banco Santander SA.
According to Carlos Fadigas, Braskem's chief financial officer, in a telephone interview, banks have been unwilling to make these loans as the U.S. mortgage crisis build up worry about monetary system solvency.
We had to do a lot more work to get this loan, but in the end, in this climate, it shows that the banks are still eager to lend to good credits.
Brazil may probably gain 4.5 percent this year and about 3.5 percent next year, he said. Braskem exported $2.2 billion of thermoplastic resins and other products in the last 12 months.
In order to diminish the risk of interest rate, Braskem is in view of a swap that would exchange the floating rate charged on the secured loans for a fixed rate of 5.5 percent to 6 percent, revealed by Fadigas.
However, such a swap will give place more security over the long term and condense the exposure to interest-rate changes,'' he added.
He further added that the power of its managing shareholders, Petroleo Brasileiro SA, Brazil's state-controlled Oil Company, and Odebrecht, a construction, oil and chemicals group, also helped to gain these loans.
