The new restructuring option for Braskem S.A. (BAK) worsens the outlook for holders of senior unsecured notes, according to Freedom Broker analysts. A possible partial debt write-off shows that extending maturities and deferring interest is no longer sufficient, while new $2 bn financing may gain priority over existing obligations. Freedom Broker reaffirmed an “Avoid” rating on the BRASKM 7.25’33 issue.
What is Braskem S.A.
Braskem is a Brazilian petrochemical company and the largest producer of thermoplastic resins in North and South America. It manufactures polyethylene, polypropylene, polyvinyl chloride and basic petrochemical products, operating in Brazil, the U.S., Mexico, Europe and Asia.
A debt write-off appears in the plan for the first time
Since August, Braskem has been conducting an out-of-court restructuring of debt obligations totaling about $11 bn. After creditors rejected the initial terms, the company sent creditors a more detailed proposal for an out-of-court restructuring of $10.9 bn in unsecured financial obligations. For the first time, the new version allows that Braskem may not repay the full amount of debt: part of the obligations to creditors could be cancelled, and bondholders would receive less than par.
The company’s initial proposal and the plan dated August 24 did not include such a condition—they contemplated changes to the timing and порядок of payments without a direct reduction of principal. Such a deal format is rather negative for holders of unsecured notes, Freedom Broker analysts note.
In the analysts’ view, the appearance of this clause indicates that merely pushing out maturities and deferring interest payments is not enough to restore the sustainability of Braskem’s capital structure.
New financing may gain priority
The company is also discussing raising about $2 bn from creditors. Of this amount, about $1.25 bn is expected to be used to repurchase existing debt at a price of up to 50% of par, and another roughly $750 mn to finance working capital.
Analysts warn that the new funds will likely require priority status or collateral. In that case, the relative position of existing senior unsecured creditors could deteriorate.
At the same time, a buyback at up to 50% of par cannot automatically be considered a recovery level for all bonds. The proposed mechanism applies only to part of the claims and does not yet define exchange terms, new maturities and coupons, debt allocation seniority, collateral, or terms for creditors who do not participate in the buyback.
Without information on the sources, cost and seniority of the new financing, it is still impossible to assess its ultimate impact on the value of senior unsecured bonds, Freedom Broker emphasizes.
Creditors are waiting for shareholder support
Eurobond holders demand that Braskem’s controlling shareholders— Petrobras (PBR) and IG4 Capital—provide a legally binding commitment to inject $3 bn of capital or guarantee additional funding if needed.
Petrobras does not agree to provide such financing, but is ready to discuss other deal terms, including a potential write-off of claims. Braskem, Petrobras and IG4 Capital have not publicly commented on the details of the proposal. Petrobras’s refusal to commit to additional financing increases the risk of protracted negotiations and a move to court-supervised restructuring, analysts believe.
Two deadlines to finalize the deal
The next key milestone will be October 9. By this date, the parties must determine the main terms of the agreement. The final deadline for approving the out-of-court plan is set for November 22.
By the November date, Braskem needs to obtain support from holders of more than 50% of the claims included in the restructuring. As of the filing on August 24, creditors representing 39.6% of such claims had joined the plan.
The divergence between shareholders’ and creditors’ positions increases the likelihood that the main terms will not be agreed by October 9 and that by November 22 the company will not secure the required majority of votes. If an agreement is not reached, Braskem may move to court-supervised restructuring.
Bonds trade significantly below par
As of September 21, the BRASKM 4.5’28 issue was trading at about 57.07% of par value. Senior unsecured bonds maturing in 2030–2033 were in a range from 44.16% to 59.51% of par.
The BRASKM 7.25’33 issue was valued at approximately 55.27% of par, while a separate issue maturing in 2032 was at 59.51%. The long-dated BRASKM 7.125’41 bonds were trading around 55.74% of par.
The subordinated BRASKM 6.85’81 issue stood at 31.67% of par, down by about 1.7 percentage points compared with the end of August. Freedom Broker maintained an “Avoid” rating on the BRASKM 7.25’33 bonds.
Leverage remains high
In 2Q 2026, Braskem posted consolidated EBITDA of $1.04 bn and net profit of $664 mn. The improvement was driven by widening spreads on chemical and petrochemical products: higher oil and naphtha prices increased costs for Asian producers, which in turn lifted international prices for resins and chemicals.
Despite the profit, the company’s leverage remains significant. As of June 30, gross corporate debt was $10.4 bn, adjusted net debt was $9.5 bn and increased by 3% over the quarter. The net debt/EBITDA ratio reached 6.74x. Over the quarter, Braskem used about $15 mn in cash—the outflow was linked to feedstock price volatility and increased inventories.
This is not an individual investment recommendation.