September 23, 2010 08:55 AM Eastern Daylight Time

RIO DE JANEIRO & CHICAGO—( BUSINESS WIRE )—Fitch Ratings has assigned a ‘BB+’ rating to Braskem S.A.’s (Braskem) proposed perpetual bonds issuance of approximately USD350 million. The bonds will be issued through Braskem Finance Limited and will be unconditionally and irrevocably guaranteed by Braskem. The guarantee will rank pari passu with other unsecured and unsubordinated obligations of Braskem. Net proceeds from the proposed issuance will be used for the repayment of debt, including the 9.75% perpetual bonds and 9.00% perpetual bonds issued in 2005 and 2006, respectively, and for general corporate purposes.

Fitch currently rates Braskem as follows:

—Long-term foreign currency Issuer Default Rating (IDR) ‘BB+';

—Long-term local currency IDR ‘BB+';

—National scale rating ‘AA(bra)’.

The Rating Outlook is Stable.

Braskem’s ratings reflect its dominant position in the Brazilian and Latin American petrochemical sector. The company enjoys a competitive advantage within the region’s petrochemical industry due to its vertical integration, strong relationship with Petrobras, and raw material diversification, strengthened with the recent acquisition of Quattor Participacoes S.A (Quattor). The company’s ratings are also supported by its strong liquidity position and manageable debt amortization schedule.

Braskem’s performance is strongly focused on the Brazilian economy, as around 67% of its revenue is generated by the local market, although its prices are benchmarked to the international market. For 2010 and 2011, Fitch expects that Brazilian GDP will exhibit growth of 7.0% and 4.5%, respectively. The favorable environment for the domestic market should partially mitigate a more challenging global environment for the petrochemical industry. Braskem’s main challenges are related to the integration of recently acquired assets during a period of soft prices for its products.

As of June 30, 2010, the company held a comfortable liquidity position and refinancing risk was low. Braskem’s total debt was BRL15.8 billion, and cash and marketable securities were BRL3.4 billion with debt amortizations of just BRL2.4 billion through to the end of 2011, which include payments under the tax rescheduling program (Refis). Braskem’s EBITDA and funds from operations (FFO) were BRL2.9 billion and BRL1.3 billion, respectively, during the last 12-month (LTM) period ended June 30, 2010. On a pro forma basis including the acquisitions of Quattor and Sunoco Chemical (Sunoco), Braskem’s consolidated EBITDA reached BRL3.8 billion for the same period.

Braskem’s credit metrics are recovering from high leverage levels following its recent acquisition spree, in line with Fitch expectations. Braskem should continue to benefit from cost and operating synergies following the acquisitions of Quattor and Sunoco, as well as an improving business environment. On a Fitch calculated basis, this scenario should result in a net debt-to-EBITDA ratio of around 3 times (x) by the end of 2010, from a pro forma figure of 5x in 2009. As of June 30, 2010, the company’s pro forma net debt-to-LTM EBITDA ratio was 3.3x, which compares well with the net debt-to-EBITDA ratios of 3.4x and 3.8x in 2009 and 2008, respectively, indicating an improving trend. Further deleveraging efforts beyond 2011 will depend on the company’s ability to improve profitability and on its level of investments to achieve its goal of becoming a major player in the global petrochemical industry.

Braskem’s liquidity remains substantial and this position is essential to support the ratings. Even after the acquisition, Braskem’s liquidity position remains robust compared to its short-term debt and scheduled amortizations. The company has shown success on its strategy to refinance Quattor’s debt. With the shareholder’s capitalization (BRL3.7 billion), the company was able to prepay Quattor’s debts and look for improvements in terms of payment terms and financial costs through others capital market issuances.

The ratings may come under pressure if the company is unable to capture expected synergies from the recent acquisitions and reduce overall indebtedness. In the medium term, event risk remains high, as the company continues to seek growth through acquisitions abroad. The financing strategy taken to fund future acquisitions and the size and funding for any future investment plans could also negatively affect the company’s leverage, liquidity and credit ratings, depending on the composition of debt used. The ratings could benefit from greater-than-expected cash generation which could translate into sustainable reduction in leverage and have a positive effect on the company credit profile.

Additional information is available at www.fitchratings.com.

These rating actions reflect the application of Fitch’s current criteria which are available at ‘www.fitchratings.com ‘ and specifically includes the following reports:

—‘Corporate Rating Methodology’, Aug. 16, 2010.

—‘National Ratings — Methodology Update’, Dec. 18, 2006.

Applicable Criteria and Related Research:

Corporate Rating Methodology

National Ratings — Methodology Update

FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY’S PUBLIC WEBSITE ‘WWW.FITCHRATINGS.COM ‘. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH’S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE ‘CODE OF CONDUCT’ SECTION OF THIS SITE.