Shares of Braskem SA rose in trading Monday, defying a severe credit downgrade from Fitch Ratings that placed the Brazilian petrochemical giant at a near-default level.
The rating agency cut Braskem’s issuer default probability to 'C', a move that typically signals imminent insolvency or restructuring failure.
Despite the downgrade, equity markets responded with buying interest, suggesting investors believe the company’s legal protections will hold and that a path to financial stabilization remains viable.
Fitch characterized Braskem’s use of judicial recovery proceedings as a de facto default, noting that the court-ordered injunction against creditors effectively suspends normal debt obligations.
The agency’s action highlights the tension between legal technicalities and market perception in distressed debt scenarios.
While the rating reflects the severity of the company’s liquidity constraints, the share price movement indicates that equity holders are betting on a successful restructuring outcome rather than liquidation.