Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<ul>
<li>
Operational Momentum: Strong volume recovery and cost efficiencies drove 4Q25 EBITDA above consensus, signaling a pivot toward healthy free cash flow generation despite cyclical commodity pricing headwinds.</li>
<li>
Deleveraging Focus: Strategic capex reduction of 20% in 2026 and improved pulp pricing visibility support the goal to reduce net debt to $11 billion, reinforcing balance sheet resilience.</li>
<li>
Selective Value: While overall spreads appear fair, the 2031 and 2032 bonds offer superior risk-adjusted carry and convexity compared to the expensive, rate-sensitive long end of the curve.</li>
</ul>



Operational Momentum: Strong volume recovery and cost efficiencies drove 4Q25 EBITDA above consensus, signaling a pivot toward healthy free cash flow generation despite cyclical commodity pricing headwinds.

Deleveraging Focus: Strategic capex reduction of 20% in 2026 and improved pulp pricing visibility support the goal to reduce net debt to $11 billion, reinforcing balance sheet resilience.

Selective Value: While overall spreads appear fair, the 2031 and 2032 bonds offer superior risk-adjusted carry and convexity compared to the expensive, rate-sensitive long end of the curve.


Suzano 4Q25: Volume Recovery Supports Healthy Cash Generation

<ul>
<li>Suzano’s 3Q25 results were soft but broadly in line, with pulp volumes and prices weighing on margins. Healthier pricing and cost discipline should support gradual margin recovery.</li>
<li>We upgrade the 2031 notes to Overweight after spreads widened 21 bps, creating more attractive relative value versus LatAm BBB peers and Suzano’s own curve.</li>
<li>We expect improving pulp prices, Ribas cost efficiencies, and disciplined capital allocation to strengthen margins, liquidity, and deleveraging capacity over the next 9–12 months.</li>
</ul>


Suzano’s 3Q25 results were soft but broadly in line, with pulp volumes and prices weighing on margins. Healthier pricing and cost discipline should support gradual margin recovery.
We upgrade the 2031 notes to Overweight after spreads widened 21 bps, creating more attractive relative value versus LatAm BBB peers and Suzano’s own curve.
We expect improving pulp prices, Ribas cost efficiencies, and disciplined capital allocation to strengthen margins, liquidity, and deleveraging capacity over the next 9–12 months.


Suzano 3Q25: Results Soft but Broadly In Line with Expectations

MD, Leaf & Ledger Limited

Leaf & Ledger Limited

Formed in 2024, Leaf & Ledger is a European advisory and research firm serving institutional investors and managers. We focus on real assets and private markets, with public-market read-throughs where material. Our work emphasises valuation signals, market structure, and execution topics that translate technical assessment into underwriting and strategy.

Insight That Moves Capital

Cross Asset Strategy

<ul>
<li>
 High miss probability: Suzano has $2.75B SLBs. The 2031 SPT needs 2025 intensity to fall 14% YoY, while the largest one-year reduction since 2019 is ≈2.9%. A miss is likely.</li>
<li>
 Catalyst within months: Observation windows end YE 2025 and 2026. Coupons reset from July and September 2026. Vendor updates often lag disclosure, creating a tradable timing gap.</li>
<li>
 How to position: Accumulate select SLBs into verification for carry when SPTs miss. Trade equity around KPI disclosures as a read on efficiency and capex cadence.</li>
</ul>



 High miss probability: Suzano has $2.75B SLBs. The 2031 SPT needs 2025 intensity to fall 14% YoY, while the largest one-year reduction since 2019 is ≈2.9%. A miss is likely.

 Catalyst within months: Observation windows end YE 2025 and 2026. Coupons reset from July and September 2026. Vendor updates often lag disclosure, creating a tradable timing gap.

 How to position: Accumulate select SLBs into verification for carry when SPTs miss. Trade equity around KPI disclosures as a read on efficiency and capex cadence.


<ul>
<li>Argentina’s election setback hit bonds, peso, and equities, reviving “Kicillof risk” and raising concerns over reform momentum, legislative gridlock, and elevated political risk premia.</li>
<li>Suzano priced $1bn 2036s inside guidance, highlighting strong demand and proactive liability management, while Pemex’s $9.9bn buyback and Moody’s B1 upgrade underscored sovereign support.</li>
<li>Markets diverged: LatAm credit widened on Argentine risk, EM and U.S. indices tightened, Argentina’s equities plunged, Brazil and Mexico rallied, oil softened, and U.S. Treasury yields declined.</li>
</ul>


Argentina’s election setback hit bonds, peso, and equities, reviving “Kicillof risk” and raising concerns over reform momentum, legislative gridlock, and elevated political risk premia.
Suzano priced $1bn 2036s inside guidance, highlighting strong demand and proactive liability management, while Pemex’s $9.9bn buyback and Moody’s B1 upgrade underscored sovereign support.
Markets diverged: LatAm credit widened on Argentine risk, EM and U.S. indices tightened, Argentina’s equities plunged, Brazil and Mexico rallied, oil softened, and U.S. Treasury yields declined.


<ul>
<li>LatAm credit markets ended the week mixed as the LatAm Aggregate Index widened to 280 bps while EM spreads and U.S. yields remained stable.</li>
<li>In 2Q25 earnings, Vista, Minerva, and YPF delivered strong results supporting Overweight views, while Suzano, Cemex, and Telecom face spread constraints amid operational pressures.</li>
<li>MercadoLibre’s growth remains solid but limited spread compression, and Pemex benefits from government support.</li>
</ul>


LatAm credit markets ended the week mixed as the LatAm Aggregate Index widened to 280 bps while EM spreads and U.S. yields remained stable.
In 2Q25 earnings, Vista, Minerva, and YPF delivered strong results supporting Overweight views, while Suzano, Cemex, and Telecom face spread constraints amid operational pressures.
MercadoLibre’s growth remains solid but limited spread compression, and Pemex benefits from government support.


Weekly News & Views - 2Q25 Earnings Recap

Brazil

Suzano is a Brazilian producer of pulp and paper products, operating in segments such as pulp, paper, and consumer goods. The company is the world's leading pulp supplier and a major paper and packaging producer in the Americas. Suzano offers products like printing and writing papers, paperboards, tissue papers, and fluff pulps used in everyday items like toilet paper, packaging, and personal hygiene products. The company was founded in 1924 and is headquartered in Salvador, Brazil.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Suzano (SUZ US)

Suzano 4Q25: Volume Recovery Supports Healthy Cash Generation

Suzano’s 4Q25 beat signals a cash flow inflection point. Discover why we favor the 2031s and 2032s for optimized carry as the global pulp leader...

Leandro Gubler

Suzano 3Q25: Results Soft but Broadly In Line with Expectations

Upgrade on 2031s following improved relative value, we see healthier pulp prices and cost discipline supporting gradual margin recovery

Leandro Gubler

Suzano SLBs, High Miss Risk Into 2026

Suzano's $2.75B SLBs face high miss risk as 2031 SPT needs intensity to drop 14% YoY. Watch for catalysts by YE 2025, and position accordingly for...

EC

EM Spreads - Weekly News & Views

Argentina's election setback impacts bonds, peso, and equities, raising concerns over reform momentum and political risk, while LatAm credit...

Leandro Gubler

Weekly News & Views - 2Q25 Earnings Recap

LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

Leandro Gubler

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Suzano 4Q25: Volume Recovery Supports Healthy Cash Generation

Suzano’s 4Q25 beat signals a cash flow inflection point. Discover why we favor the 2031s and 2032s for optimized carry as the global pulp leader...

Leandro Gubler

Suzano 3Q25: Results Soft but Broadly In Line with Expectations

Upgrade on 2031s following improved relative value, we see healthier pulp prices and cost discipline supporting gradual margin recovery

Leandro Gubler

Suzano SLBs, High Miss Risk Into 2026

​Suzano's $2.75B SLBs face high miss risk as 2031 SPT needs intensity to drop 14% YoY. Watch for catalysts by YE 2025, and position accordingly for...

EC

EM Spreads - Weekly News & Views

​Argentina's election setback impacts bonds, peso, and equities, raising concerns over reform momentum and political risk, while LatAm credit...

Leandro Gubler

Weekly News & Views - 2Q25 Earnings Recap

​LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.

Leandro Gubler

Suzano's $2.75B SLBs face high miss risk as 2031 SPT needs intensity to drop 14% YoY. Watch for catalysts by YE 2025, and position accordingly for...

Argentina's election setback impacts bonds, peso, and equities, raising concerns over reform momentum and political risk, while LatAm credit...

LatAm credit markets show mixed results, with some companies delivering strong earnings while others face operational pressures.