Senior Credit Analyst - Emerging Markets, EM Spreads

Leandro Gubler

EM Spreads is an independent credit research service specializing in Emerging Markets, primarily focusing on Latin American issuers.

Senior Credit Analyst - Emerging Markets

CSN 4Q25: Structural Risks and Execution Remain Central

CSN 1Q26: Bridge Loan Supports a Show-Me Credit

CSN 2Q26: Better Operations, Credit Still Execution-Driven

CSN 3Q25: Mining Strength Offsets Steel Weakness

CSN Launches Divestment Plan to Reduce Debt by R$15–18 Billion

EM Spreads

Credit

Companhia Siderurgica Nacional (CSNA3 BR)

<ul>
<li>
Execution Risk Downgrade: S&amp;P’s downgrade to B+ reflects skepticism over the R$16–18bn asset sale timeline; however, the shift toward outright sales rather than IPOs improves deleveraging certainty for bondholders.</li>
<li>
Strategic Inflection Point: Management’s potential exit from steelmaking signals a radical balance sheet solution that could cut net leverage to 2.0x, though it increases long-term sensitivity to iron ore cycles.</li>
<li>
Attractive Total Return: CSN 2031 and 2032 bonds offer compelling carry and convexity, trading at a 590 bps spread premium that overcompensates for timing risks and backward-looking rating methodologies.</li>
</ul>



Execution Risk Downgrade: S&amp;P’s downgrade to B+ reflects skepticism over the R$16–18bn asset sale timeline; however, the shift toward outright sales rather than IPOs improves deleveraging certainty for bondholders.

Strategic Inflection Point: Management’s potential exit from steelmaking signals a radical balance sheet solution that could cut net leverage to 2.0x, though it increases long-term sensitivity to iron ore cycles.

Attractive Total Return: CSN 2031 and 2032 bonds offer compelling carry and convexity, trading at a 590 bps spread premium that overcompensates for timing risks and backward-looking rating methodologies.


CSN: S&P Downgrade Reinforces Execution Risk, Thesis Persists