Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

Braskem is a global petrochemical company specializing in the production and sale of thermoplastic resins, including polyethylene, polypropylene, and PVC, as well as basic petrochemicals and fuels. Its products serve various industries such as packaging, automotive, construction, and consumer goods. The company is headquartered in São Paulo, Brazil, and was founded in August 2002.

<ul>
<li>Underweight from Neutral on valuation: Principal impairment and creditor-funded, potentially secured new money are now on the table, yet the 2028–2041 curve still averages $54.7, leaving limited recovery cushion.</li>
<li>Proposal cuts debt, but not enough: At 50-cent buybacks, debt-funded US$2.0bn new money nets only ~US$0.5bn gross reduction versus our US$4–5bn need; a group of bondholders demands US$3.0bn shareholder equity.</li>
<li>Rotate from the belly into the 2050s: At $43.3, ~15 points below the 2031s, they cushion better if consideration converges; Neutral, though preserved coupons and maturities would reverse the edge.</li>
</ul>


Underweight from Neutral on valuation: Principal impairment and creditor-funded, potentially secured new money are now on the table, yet the 2028–2041 curve still averages $54.7, leaving limited recovery cushion.
Proposal cuts debt, but not enough: At 50-cent buybacks, debt-funded US$2.0bn new money nets only ~US$0.5bn gross reduction versus our US$4–5bn need; a group of bondholders demands US$3.0bn shareholder equity.
Rotate from the belly into the 2050s: At $43.3, ~15 points below the 2031s, they cushion better if consideration converges; Neutral, though preserved coupons and maturities would reverse the edge.


Braskem: A Haircut Enters the Talks, but the Cash Is Still Missing

iShares MSCI Brazil Small-Cap ETF is an exchange-traded fund incorporated in the USA. The ETF seeks to track the performance of the MSCI Brazil Small Cap Index Fund.

<ul>
<li>Neutral from Underweight: Flávio Bolsonaro's first-round lead and PL's gains in Congress remove most event risk, but we think markets are pricing consolidation before any fiscal framework exists.</li>
<li>Fiscal arithmetic unchanged: Gross debt rises to 102.3% of GDP by 2028 on a near-zero primary balance; the 2027 budget stays with the outgoing Congress, delaying execution.</li>
<li>Valuation caps upside: Brazil 2035s offer 8 bps over Mexico 2034s after 28 bps of compression in three weeks; we stay defensive and favor switching out of the 2041s.</li>
</ul>


Neutral from Underweight: Flávio Bolsonaro's first-round lead and PL's gains in Congress remove most event risk, but we think markets are pricing consolidation before any fiscal framework exists.
Fiscal arithmetic unchanged: Gross debt rises to 102.3% of GDP by 2028 on a near-zero primary balance; the 2027 budget stays with the outgoing Congress, delaying execution.
Valuation caps upside: Brazil 2035s offer 8 bps over Mexico 2034s after 28 bps of compression in three weeks; we stay defensive and favor switching out of the 2041s.


Brazil Sovereign Debt: The Ballot Moved, the Budget Has Not

Petroleos Mexicanos operates as an oil and gas exploration and production services. The Company offers pipeline carriage, petrochemical distributor and shipping centers, logistics, and fuel commercialization services. Petroleos Mexicanos serves customers in Mexico.

<ul>
<li>We maintain Overweight with lower conviction, preferring the 7.690% 2050s for new money and the 6.625% 2035s for lower-duration accounts.</li>
<li>The 69% cut in 2027 federal transfers reflects a lighter maturity burden from liability management, not stronger standalone cash generation or weaker sovereign support.</li>
<li>Front-End refinancing gains are largely priced in; relative value has shifted long, where the 2050s offer superior spread-per-duration compensation but greater downgrade and supply sensitivity. </li>
</ul>


We maintain Overweight with lower conviction, preferring the 7.690% 2050s for new money and the 6.625% 2035s for lower-duration accounts.
The 69% cut in 2027 federal transfers reflects a lighter maturity burden from liability management, not stronger standalone cash generation or weaker sovereign support.
Front-End refinancing gains are largely priced in; relative value has shifted long, where the 2050s offer superior spread-per-duration compensation but greater downgrade and supply sensitivity. 


Pemex: Lower 2027 Transfer Reflects Refinancing Progress

Global Head of Research & Head of Europe, Lucror Analytics

Felix Fischer

Global Head of Research & Head of Europe

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

<ul>
<li>In our latest Asia Monthly, we review the performance of major Asian credit indices and UST curve movements in September 2026.</li>
<li>We also provide a recap of major news and macroeconomic releases, including those from the US, China, India, Indonesia and Japan.</li>
<li>In addition, we summarise the top/bottom performers, recent USD bond issuances and rating actions in Asian corporate credit, as well as a list of our recent research.</li>
</ul>


In our latest Asia Monthly, we review the performance of major Asian credit indices and UST curve movements in September 2026.
We also provide a recap of major news and macroeconomic releases, including those from the US, China, India, Indonesia and Japan.
In addition, we summarise the top/bottom performers, recent USD bond issuances and rating actions in Asian corporate credit, as well as a list of our recent research.


Asia Monthly - September 2026 In Review - Lucror Analytics

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Betashares US Treasury Bond 7-10 Year Currency Hedged ETF is an ETF domiciled in Australia. The Fund aims to provide an investment return that aims to track the performance of the Bloomberg U.S. Treasury: 7-10 Year Total Return Index Hedged AUD. The Fund invests in the securities that comprise the Index, which are investment grade, fixed rate US Treasury bonds.

<ul><li>Surging long-term bond yields raise asset discount rates, putting global equities at risk of valuation de-rating.</li><li>A weaker euro supports the dollar, while higher Western real yields pressure non-dollar assets, including gold and Asian currencies, and increase the risk of capital outflows.</li><li>The Thai stock market, up around 25% YTD, fell sharply last week as US funds (under IRC Section 4982) and European funds took profits ahead of their fiscal year-end and managed tax obligations, suggesting selling unrelated to fundamentals.</li></ul>

Surging long-term bond yields raise asset discount rates, putting global equities at risk of valuation de-rating.A weaker euro supports the dollar, while higher Western real yields pressure non-dollar assets, including gold and Asian currencies, and increase the risk of capital outflows.The Thai stock market, up around 25% YTD, fell sharply last week as US funds (under IRC Section 4982) and European funds took profits ahead of their fiscal year-end and managed tax obligations, suggesting selling unrelated to fundamentals.

US, Japan and Europe: Three Pressures Keep Global Yields Surging

Credit
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