This third quarter, Braskem successfully concluded three important financial operations as part of its strategy to improve its debt profile and reduce its cost of capital.

Two of these operations were: the launching of a bond (notes) worth a total of US$ 275 million and a partial tender-offer (repurchase) for bonds worth US$ 184.6 million. The other operation refers to the conclusion of a debenture issuance worth R$ 500 million. The objective of these initiatives, explains Paul Atit, vice-president of Finance and Investor Relations, is to even further improve the company’s debt profile and reducing Braskem’s cost of capital.

The issuance of Notes worth US$ 275 million was closed with an 8% coupon and maturity in 10 years. Parallel to this operation, Braskem also concluded the partial repurchase of bonds that would mature in November 2008 worth a total of US$ 184.6 million and that corresponds to 67% of the original issuance. These bonds were earning 12.5% in interest.

Also this quarter, Braskem issued R$ 500 million in nonconvertible debentures, maturing in 5 years and with remuneration equivalent to 103.5% of the CDI. The operation was led by BB Investimento and coordinated by ABN and Citigroup.

This series of actions is in line with the company’s strategy to guarantee excellence in managing its debt, always seeking the complete adjustment of its profile to its cash flow and the reduction of the average funding cost.  

The vice-president explains that excluding the convertible debentures detained by the controller and maturing July 2007, the amortization of the company’s average debt will be below US$ 200 million per year, which may be considered very comfortable after taking into account the company’s capacity to generate cash.