By Brazil Stock Guide – Braskem (B3: BRKM5; NYSE: BRKM) has triggered the first interest-rate reset on its ultra-long hybrid bond, lifting the coupon on the subordinated notes due in 2081 and reinforcing the mounting financial pressure on a highly leveraged petrochemical group undergoing a transfer of control from Novonor to IG4 Capital, the asset manager representing Braskem’s bank creditors and effectively steering the company’s debt-driven restructuring.
According to a notice released on January 23, the notes issued by Braskem Netherlands Finance B.V. — the company’s Dutch financing vehicle — will now accrue interest at 12.004% per year, up from the original 8.50% fixed rate in place since the bond was launched in July 2020. The adjustment took effect on January 23, 2026, in line with provisions set out in the bond’s indenture.
The securities are structured as fixed-to-reset subordinated notes with a maturity extending to 2081, carrying hybrid characteristics that allow partial equity treatment on balance sheets while ranking below senior debt in the capital structure. Instruments of this type are commonly used to strengthen leverage metrics without diluting shareholders, but they come with significantly higher coupons once reset dates are reached.
The new rate will remain in effect until January 23, 2031, implying a jump of roughly 350 basis points compared with the initial coupon. While the reset was fully anticipated by investors, the magnitude of the increase highlights the steeper risk premium demanded for long-dated emerging-market credit, particularly in cyclical sectors such as petrochemicals.
From a financial standpoint, the higher coupon translates into a heavier interest burden over time, reinforcing the role hybrid instruments can play in pressuring cash flow once promotional fixed-rate periods expire. It also offers a clear signal of the company’s marginal cost of capital in international markets amid tighter global financial conditions.
The notice was formally delivered to bondholders and to the Singapore Exchange Securities Trading Limited, where the notes are listed, in compliance with disclosure and listing requirements.
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