Brazilian petrochemicals company Braskem is evaluating whether to draw down on its US$1bn revolving credit facility, according to a banking source and others.

The move to withdraw a portion or its entire credit facility comes as companies shore up their cash balances to withstand the economic slowdown caused by the coronavirus pandemic.

Concerns over the respiratory virus have sent financial markets into a frenzy over the last month as many businesses have closed their doors and ceased operations on government orders, while people around the world are self-isolating to limit the spread of the virus.

Braskem is evaluating the option to withdraw its dollar-denominated credit facility, but no decision was final yet, the company said in an email communication with Refinitiv LPC.

The Brazilian company has also formed a crisis committee to establish procedures for the health of its staff and the continuity of operations, Braskem said in a statement to its shareholders on March 20.

If Braskem were to draw down, it would join a host of other companies globally that have drawn from their credit lines in recent weeks as they too cope with the devastating impact of the coronavirus.

Mexican peer Orbia, formerly known as Mexichem, drew down US$1bn from its US$1.5bn credit line, the company said in a press release on March 27.

Earlier this month, Brazil’s state-owned oil producer Petróleo Brasileiro also said it has drawn on US$8bn in dollar-denominated revolving loans and disbursed 3.5bn Brazilian reais in local currency credit lines.

Brazilian miner Vale has also borrowed US$5bn from two facilities, while Mexican baker Grupo Bimbo and Mexican media company Televisa have also tapped existing revolving credit lines, the companies have said in press releases this month.

Braskem raised its US$1bn revolving credit facility in May 2018.

Braskem’s five-year facility pays 125bp over Libor. If the company draws on more than 33% of the revolver, but less than 66%, the margin will increase by 15bp, but if it withdraws more than 66% of the facility, then the margin will increase by 30bp, sources said.

ABN Amro, BNP Paribas, Credit Agricole, Citigroup, Santander and SMBC arranged the transaction.

São Paulo, Brazil-headquartered Braskem is one of the largest petrochemicals producers in Latin America.