Braskem’s restructuring story has entered a new phase. In our latest Flash, we look at the company’s extrajudicial reorganization in Brazil, the more advanced Chapter 11 process at Braskem Idesa, and the increasingly important role of IG4 and Petrobras in shaping the final outcome. The direction of travel is constructive: process visibility has improved and the risk of a disorderly outcome has declined. However, key economic terms remain open, including maturity extensions, cash versus PIK interest, potential equitization and the amount of effective shareholder support. From a fixed-income perspective, we remain neutral. After the strong rally in the bonds, the risk/reward is now more balanced. In distressed credit, process matters – but ultimately, recovery is driven by the final economics.
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