Credit

• Key Outcome: CSN’s bridge loan improves near term funding visibility, but the credit remains a show-me deleveraging story tied to asset sales and cash conversion.
• Risk/Volatility: Liquidity quality remains the main caveat, with negative free cash flow, tight parent-level cash, secured debt risk, and refinancing execution still unresolved.
• Valuation Driver: Distressed pricing still compensates investors, but upside depends on visible asset monetization, debt reduction, and stronger recurring cash generation.

• Key Outcome: Braskem’s sequential EBITDA recovery improves optionality, but the credit remains driven by liquidity preservation, working capital access, and capital structure execution.
• Risk/Volatility: Very high leverage, negative FFO, weak liquidity coverage, and the December 2026 standby maturity keep recovery dependent on creditor negotiations.
• Valuation Driver: The bond rally reduces margin of safety, leaving the 2031s as the preferred expression for accounts maintaining exposure to resolution upside.

• Key Outcome: Softer EBITDA, negative FOCF and higher leverage narrow room for error, but JBS’s scale, liquidity and diversification keep the Overweight thesis intact.
• Risk/Volatility: North America Beef, weak cash conversion and the June dividend are the main pressure points, making 2H26 cash recovery more important for bondholders.
• Valuation Driver: The long end remains the preferred expression, with the 6.500% 2052s offering the cleanest balance of carry, spread pickup and dollar price risk.

• Key Outcome: YPF’s shale transition is strengthening credit resilience, with 1Q26 EBITDA up 28.1% YoY, leverage down to 2.01x, and lifting costs at $8.8/boe.
• Risk/Volatility: Valuation now requires more discipline after the rally, with YPF already trading materially inside Argentina sovereign risk and political-cycle volatility still relevant.
• Valuation Driver: We still prefer the 8.250% 2034s as the best belly expression, while long-end extension offers insufficient spread pickup for the added duration.

• Better entry value: The 2031s have widened meaningfully since 4Q25, restoring spread cushion and becoming Minerva’s cleanest risk-adjusted curve expression.
• Execution risk remains: Higher cattle costs, negative post-working-capital FCF, and cash interest coverage below 2.0x keep the credit story balanced rather than improving.
• Valuation driver: Scale, pricing, liability management, and integration support EBITDA, but stronger free cash flow conversion is needed for a more constructive stance.

• Neutral maintained: Suzano’s cost leadership, liquidity, and pulp pricing support credit quality, but elevated leverage and tighter spreads limit upside.
• Cash flow pressured: 1Q26 reflected seasonality, BRL strength, lower shipments, and maintenance downtime, while stronger USD pulp prices were diluted in reported BRL EBITDA.
• Belly preferred: The 2032s offer the best risk-adjusted curve exposure, while front-end pull-to-call risk and long-end duration limit incremental value.

• Key Outcome: North America carried 1Q26 earnings, supporting 23.2% YoY adjusted EBITDA growth and reinforcing Gerdau’s status as a resilient BBB LatAm industrial credit.
• Risk/Volatility: Brazil remains the main earnings drag, with import pressure, cost headwinds, and only gradual margin recovery limiting the near term upside case.
• Valuation Driver: Neutral is maintained as Gerdau’s credit quality is largely priced in, with 2035s preferred for holding but not adding below 120 bps OAS.

• Key Outcome: Cemex’s Mexico recovery, pricing discipline, and Project Cutting Edge savings support margin expansion, reinforcing a constructive credit trajectory despite a Neutral stance.
• Risk/Volatility: U.S. residential weakness, trade uncertainty, energy inflation, and Mexico-specific risks could pressure volumes or spreads in a broader EM risk-off move.
• Valuation Driver: Bonds already trade tight to averages, making curve selection critical, with 2029s defensive and 2031s offering better risk-adjusted carry.

• In our latest Asia Monthly, we review the performance of major Asian credit indices and UST curve movements in April 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.

• Emerging Market Outlook and Strategy publication updated with team’s latest views
• Increased caution in EM local markets due to extended valuations, higher positioning, and heightened uncertainty
• Neutral stance adopted with focus on resilient parts of the market, avoiding outright bearish position given ongoing geopolitical and economic factors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• A spike in oil prices usually leads to a spike in credit spread of risky assets.
• We expect rising oil prices to boost inflation worldwide. G-3 rates have been low and we expect rates to start increasing towards the second half of 2026.
• Countries such as Indonesia and Malaysia should benefit from an oil spike while India, the Philippines, and Thailand could suffer from margin compression.