Braskem-Idesa (BAKIDE) announced on 8 September that it has hired a group of advisors to “review its existing capital structure and liquidity condition, and consider strategic options.”

The retentions, made directly by BAKIDE, fueled speculation about the Mexican petrochemical company’s short-term fate. Management had previously stated that any discussions between the joint venture’s two shareholders – Brazil’s Braskem and Mexico’s Idesa – regarding potential support would have occurred exclusively between them, without BAKIDE’s direct involvement.

Furthermore, while Lazard and Cleary Gottlieb – the financial advisor and international counsel hired by BAKIDE – have broad expertise, Sainz Abogados, the Mexican law firm retained by the company, is frequently engaged in debt restructurings.

Therefore, although BAKIDE’s announcement didn’t mention a restructuring, some bondholders appeared to assume one following the advisor appointments. As a result, the company’s 2029 and 2032 notes fell by up to seven points shortly afterward, erasing most of the gains recorded since early August (see Figure 1).