Rounds 2–3 and mediation - current Run 5

What changed

Run 4’s assumed hostile creditor chair is contradicted by the filed coalition. The public record confirms that the ad hoc bondholder group supported the standstill across the major bond series. It does not disclose whether Elliott or Contrarian individually signed, and it does not show acceptance of final economics.

The correct model is therefore constructive on process, hard on price.

Selected clearing package

The mediator selects one term sheet rather than leaving a range:

1. No principal haircut at closing. If year-end 2028 net leverage remains above 5.0×, convert enough debt to reach 5.0×, capped at US$1.0B.
2. Extend the 2026–2034 maturities by exactly five years. Leave the 2041, 2050 and 2081 final maturities unchanged.
3. For 24 months, pay 4% cash interest and PIK the remainder of each contractual coupon. After month 24, pay the contractual coupon plus 150bp in cash.
4. Issue creditors 17.5% fully diluted non-voting warrants at closing. Step the stake to 25% if unrestricted liquidity falls below US$750M, two-quarter EBITDA-to-cash conversion fails, PIK continues beyond month 24, or parent Mexico support exceeds US$476M.
5. Put in place approximately US$1.0B of combined working-capital and LC capacity: the R$2.35B secured Petrobras trade line plus US$570M of rolled or reinstated bank LC / working-capital capacity.
6. Maintain US$750M minimum liquidity. Sweep 50% of cash above US$1.0B and 75% of qualifying net asset-sale proceeds. Ban dividends and buybacks until net leverage is below 3.5× for two consecutive quarters.
7. Give new-money providers first liens only on receivables, inventory and controlled proceeds. Give legacy creditors limited second-lien protection on those pools and selected non-core shares. Do not mortgage the core crackers.
8. Cap parent support for Braskem Idesa at the disclosed US$476M and keep budgeted Alagoas safety and remediation cash outside creditor sweeps.

These are modeled settlement terms, not terms disclosed or accepted by the parties.

Debt math

• Corporate gross debt baseline: US$10.3B.
• First-year cash interest at 4%: approximately US$412M.
• Against the disclosed US$654M–US$665M annual cash-interest burden, paying 4% cash leaves roughly US$242M–US$253M to PIK in the first year and approximately US$0.5B over 24 months.
• The site’s US$694M Q3 EBITDA estimate annualizes to US$2.776B only as a sensitivity. Against the site’s approximately US$10.26B post-PIK net-debt assumption, leverage is about 3.7×.
• At US$2.0B normalized EBITDA, the same debt load is about 5.1×. That is the trigger case for the US$1.0B contingent conversion.

Outcome view

Combined updated-EJ outcomes rise from 50% to 57%. RJ falls eight points because the largest organized creditor constituency demonstrably accepted the process and the company needs only about another 10.4 percentage points. RJ remains 34% because the filing deferred the actual loss-allocation bargain.