Oct. 9 (Bloomberg) -- Braskem SA, Latin America's largest chemical company, secured a five-year, $725 million loan guaranteed by future exports to refinance credits used to help purchase part of the Ipiranga oil and petrochemicals group.

Braskem will pay the London interbank offered rate plus 1.75 percentage points a year, the company said in a statement to Brazil's securities and exchange regulator. In the first six months, the loan will use a different base rate of 5.016 percent, locking in a rate of 6.766 percent, the statement said.

The loan was made by 19 banks led by Celyon, Citigroup Inc. and Banco Santander SA.

Banks have been reluctant to make loans as the U.S. mortgage crisis raised concern about financial system solvency, said Carlos Fadigas, Braskem's chief financial officer, in a telephone interview.

``We had to do a lot more work to get this loan, but in the end, in this climate, it shows that the banks are still willing to lend to good credits,'' Fadigas said. ``We are extremely happy with the loan and the rate we will pay.''

Brazil is likely to grow 4.5 percent this year and about 3.5 percent next year, he said. Braskem exported $2.2 billion of thermoplastic resins and other products in the last 12 months.

Swap

To reduce interest rate risk, Braskem is considering a swap that would exchange the floating rate charged on the loan for a fixed rate of 5.5 percent to 6 percent, Fadigas said.

``Such a swap will give us more security over the long term and reduce exposure to interest-rate changes,'' he said.

The strength of its controlling shareholders, Petroleo Brasileiro SA, Brazil's state-controlled oil company, and Odebrecht, a construction, oil and chemicals group, also helped win the loan, he said.

The loan helps refinance $1.2 billion in two-year credit borrowed to purchase Ipiranga and its Cia. Petroquimica do Sul SA unit in 2007. Braskem has already sold about $500 million of 7.25 percent bonds due in 2018 to refinance the rest, he said.

To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net

Last Updated: October 9, 2008 18:39 EDT