Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

Senior Credit Analyst - Emerging Markets

EM Spreads

Credit

<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

<ul>
<li>U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage / MercadoLibre Achieves Full Investment Grade Status with S&amp;P Upgrade / Pemex Eyes US$8bn from Mixed Contracts</li>
<li>Initiating Coverage on Gerdau: IG Credit with US Exposure, Limited Spread Upside / Fitch Affirms Gerdau at BBB with Stable Outlook on Strong Fundamentals</li>
<li>Vista 2Q25: Results Reinforce Overweight, But Cash Burn and Liquidity Weaken Buffer / US Reinforces Argentina’s Appeal in YPF Expropriation Case</li>
</ul>


U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage / MercadoLibre Achieves Full Investment Grade Status with S&amp;P Upgrade / Pemex Eyes US$8bn from Mixed Contracts
Initiating Coverage on Gerdau: IG Credit with US Exposure, Limited Spread Upside / Fitch Affirms Gerdau at BBB with Stable Outlook on Strong Fundamentals
Vista 2Q25: Results Reinforce Overweight, But Cash Burn and Liquidity Weaken Buffer / US Reinforces Argentina’s Appeal in YPF Expropriation Case


<ul>
<li>Brazilian Credits in Our Coverage Show Resilience, as U.S. Tariffs Likely to Have a Modest Impact Despite Limited Macro Policy Flexibility</li>
<li>Suzano is most exposed to U.S. tariffs, but global scale, cost leadership, and FX tailwinds help cushion the impact. Gerdau could benefit from tighter U.S. supply conditions in the US. </li>
<li>CSN has just 4% U.S. exposure, with limited risk unless quotas tighten. Minerva’s 5% is manageable, supported by a diversified export base that enables flexible rerouting.</li>
</ul>


Brazilian Credits in Our Coverage Show Resilience, as U.S. Tariffs Likely to Have a Modest Impact Despite Limited Macro Policy Flexibility
Suzano is most exposed to U.S. tariffs, but global scale, cost leadership, and FX tailwinds help cushion the impact. Gerdau could benefit from tighter U.S. supply conditions in the US. 
CSN has just 4% U.S. exposure, with limited risk unless quotas tighten. Minerva’s 5% is manageable, supported by a diversified export base that enables flexible rerouting.


U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage

<ul>
<li>Suzano to Acquire 51% of Kimberly-Clark’s International Tissue Business for $1.73bn </li>
<li>Vista Priced US$500mn 2033 Unsecured Notes at Par to Yield 8.5% (IPT: mid-8%) / Cemex Launches US$1bn Perpetual NC5 Notes to Yield 7.2% (IPT: 7.625%)</li>
<li>Telecom 1Q25: Margin Gains Support Credit, But Telefónica Deal Still Central / Telecom Prices US$800 Million Unsecured Bond Due 2033 at 9.5% Yield</li>
</ul>


Suzano to Acquire 51% of Kimberly-Clark’s International Tissue Business for $1.73bn 
Vista Priced US$500mn 2033 Unsecured Notes at Par to Yield 8.5% (IPT: mid-8%) / Cemex Launches US$1bn Perpetual NC5 Notes to Yield 7.2% (IPT: 7.625%)
Telecom 1Q25: Margin Gains Support Credit, But Telefónica Deal Still Central / Telecom Prices US$800 Million Unsecured Bond Due 2033 at 9.5% Yield


<ul>
<li>The LatAm Aggregate Index contracted modestly by 1 bps to 307 bps in the week ending Friday, February 14, 2025.</li>
<li>Argentina's inflation rate slowed to 2.2% in January, the lowest monthly figure in 4.5 years, according to INDEC.</li>
<li>We upgraded Suzano’s 2031s and 2032s to Outperform, while maintaining the rest of the curve at Market Perform.</li>
</ul>


The LatAm Aggregate Index contracted modestly by 1 bps to 307 bps in the week ending Friday, February 14, 2025.
Argentina's inflation rate slowed to 2.2% in January, the lowest monthly figure in 4.5 years, according to INDEC.
We upgraded Suzano’s 2031s and 2032s to Outperform, while maintaining the rest of the curve at Market Perform.


Weekly News & Views (Suzano, YPF, Vista, Cemex, Minerva).

Brazil

Suzano S.A. develops sustainable and innovative solutions from renewable sources. The Company offers cellulose, hygiene, lignin, eucalyptus, and paper products. Suzano serves clients worldwide.

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Suzano (SUZ US)

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

EM Spreads - Weekly News & Views

US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

Leandro Gubler

U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage

Brazilian companies like Suzano, Gerdau, CSN, and Minerva show resilience against U.S. tariffs, with limited impact due to global scale, cost...

Leandro Gubler

EM Spreads - Weekly News & Views

Suzano acquires majority stake in Kimberly-Clark's international tissue business for $1.73bn, while Telecom sees margin gains in 1Q25 but still...

Leandro Gubler

Weekly News & Views (Suzano, YPF, Vista, Cemex, Minerva).

LatAm Aggregate Index slightly contracted, Argentina's inflation rate decreased to 2.2%, Suzano's bonds upgraded to Outperform.

Leandro Gubler

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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

EM Spreads - Weekly News & Views

​US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

Leandro Gubler

U.S. Tariff Escalation: Credit Implications for Brazilian Companies in Our Coverage

​Brazilian companies like Suzano, Gerdau, CSN, and Minerva show resilience against U.S. tariffs, with limited impact due to global scale, cost...

Leandro Gubler

EM Spreads - Weekly News & Views

​Suzano acquires majority stake in Kimberly-Clark's international tissue business for $1.73bn, while Telecom sees margin gains in 1Q25 but still...

Leandro Gubler

Weekly News & Views (Suzano, YPF, Vista, Cemex, Minerva).

​LatAm Aggregate Index slightly contracted, Argentina's inflation rate decreased to 2.2%, Suzano's bonds upgraded to Outperform.

Leandro Gubler

US tariffs impact Brazilian companies, MercadoLibre achieves investment grade, Pemex eyes $8bn, Gerdau coverage initiated, Vista 2Q25 results, US...

Brazilian companies like Suzano, Gerdau, CSN, and Minerva show resilience against U.S. tariffs, with limited impact due to global scale, cost...

Suzano acquires majority stake in Kimberly-Clark's international tissue business for $1.73bn, while Telecom sees margin gains in 1Q25 but still...

LatAm Aggregate Index slightly contracted, Argentina's inflation rate decreased to 2.2%, Suzano's bonds upgraded to Outperform.