Braskem Idesa, S.A.P.I. 7.450% Senior Secured Notes due 2029

§ I

Executive Summary All three maintenance-equivalent covenants are running with meaningful cushion.

3 covenants · 0 breaches · 0 warnings

Covenant	Headline	Current	Threshold	Cushion	Status
Debt Incurrence § 4.09		—	—	—	Breach
Permitted Liens § 4.12	1 computable · Plus 16 qualitative lien carve-outs (unlimited / existing / refinancing) — standard HY patterns.	$130M	cap	—	In Compliance
Restricted Payments § 4.07	Builder basket + qualitative RP carve-outs	$0M	gross cap	—	In Compliance

Ratio test (Net Debt to EBITDA Ratio) is in structural breach: Denominator negative (e.g., negative EBITDA) — ratio is mathematically defined but economically meaningless. Company cannot service debt from operations; treating as BREACH of the spirit of the covenant. Covenant Quality scored 3.0/5 (debt 3, liens 3, RPs 3).

§ II

Covenant EBITDA Build-Up Bottom-up from audited Net Income to the §1.01 defined figure. Every basket cap and ratio test downstream depends on this number.

Q3 2025

Waterfall — Braskem Idesa 2029 Final Offering Memorandum §1.01 'Consolidated EBITDA' (U.S.$900M 7.450% Senior Secured Notes due 2029). Definition is unusually bare-bones: EBITDA = Operating Profit + Non-Cash Charges, where Non-Cash Charges = D&A only. No add-backs for impairments, non-recurring items, idle expenses, restructuring, FX, or stock-based compensation. Simplest definition in the shipped corpus.

§1.01 Clause	Component	Sign	Amount ($K)	Running
start	Operating Loss (Mexico segment, Q3 2025) Braskem 3Q25 6-K — Mexico segment: Gross Profit -$71M + SG&A -$25M + Other Op Income +$12M§1.01 starts from Operating Profit (not Consolidated Net Income). Mexico segment operating loss -$84M for 3Q25.	=	-84,000	-84,000
§1.01 Non-Cash Charges (D&A only)	Depreciation and amortization 3Q25 investor presentation, R$296M ÷ 5.51 FX	+	54,000	-30,000
TOTAL	Covenant EBITDA — Q3 2025 bottom-up	=		-30,000

Reconciliation

Braskem Idesa 2029 Final Offering Memorandum §1.01 'Consolidated EBITDA' (U.S.$900M 7.450% Senior Secured Notes due 2029). Definition is unusually bare-bones: EBITDA = Operating Profit + Non-Cash Charges, where Non-Cash Charges = D&A only. No add-backs for impairments, non-recurring items, idle expenses, restructuring, FX, or stock-based compensation. Simplest definition in the shipped corpus. (this page) $-30.00M

Management-reported EBITDA
per investor presentation $-37.00M

Δ +$7.00M

Covenant EBITDA -$30M vs reported Recurring EBITDA -$37M — $7M delta is FX rounding noise, not definitional drift. OPEN ISSUE flagged for analyst follow-up: the Mexico segment recorded an R$1,468M (~$266M) impairment in 3Q25 flowed through COGS. Under the strict §1.01 read (NO impairment add-back permitted), if that impairment sits in segment Operating Profit for the quarter, Covenant EBITDA could be as low as -$296M, not -$37M. Braskem's 'Recurring EBITDA' excludes it; the indenture definition does NOT permit that carve-out. Moot for the live covenant math anyway — coupon missed 2025-11-18 on the 2029s, Cleary Gottlieb / Lazard / Sainz Abogados engaged Sep 2025 for LRE (liability-management-exercise) proceedings, indenture covenants DORMANT pre-LRE. Binding constraint is the CTA DSCR ≥1.05x, which is breached.

Filing source

Braskem 3Q25 Earnings Release (Braskem SA 6-K filed Nov 12 2025) + Braskem Idesa 3Q25 Investor Presentation

§ 4.09

Debt Incurrence Limitation on Indebtedness

Breach 6 computable baskets

Definitional caveat Indebtedness per the indenture is broader than company-reported debt (includes Disqualified Stock, Attributable Indebtedness, guarantees, hedging, securitization). Consolidated EBITDA per §1.01 may differ from reported or "adjusted" EBITDA — see the build-up above. True covenant leverage can shift modestly when reconciled to defined terms.

Effective Headroom $0.69 B

$0MRatio headroom

$686MComputable baskets

$686MTotal capacity

Ratio Tests § 4.09(a)

Test	Current	Threshold	Cushion	Capacity gauge	Status
Net Debt to EBITDA Ratio § 3.14(a)(i) [6]§ 3.14(a)(i)(i) the Net Debt to EBITDA Ratio as set forth in an Officer’s Certificate would be no more than (a) prior to the first anniversary of the Loan Repayment Event, 4.50:1.00 or (b) on and following the first anniversary of the Loan Repayment Event, 4.00:1.00; and	—	<= 4.50×	—		Breach

Permitted Baskets — Computable § 4.09(b) · 6 dollar-quantified

Clause	Basket	Resolved Cap	Formula	Capacity	Section
(1)	Indebtedness pursuant to a Working Capital Facility	$150M	the greater of U.S.$150 million (or the equivalent in other currencies) and 3.50% of Consolidated Tangible Assets	$150M cap	3.14(b)(i) [9]§ 3.14(b)(i)(i) Indebtedness pursuant to a Working Capital Facility Incurred in the ordinary course of business, Incurred on or after the occurrence of the Loan Repayment Event in an aggregate principal amount at any time outstanding not to exceed the greater of U.S.$150 million (or the equivalent in other currencies) and 3.50% of Consolidated Tangible Assets;
(2)	Indebtedness Incurred to finance, refinance or refund the purchase price or cost of property or assets	$10M	None	$10M cap	3.14(b)(ii) [14]§ 3.14(b)(ii)(ii) Indebtedness Incurred to finance, refinance or refund the purchase price or cost (including the cost of construction, development or improvement) of property or assets acquired by the Company or any Restricted Subsidiary (individually or together with other Persons) after the date hereof (by purchase, construction or otherwise), or Indebtedness Incurred to finance, refinance or refund, any such purchase price or cost in an aggregate principal amount at any time outstanding not to exceed U.S.$10 million (or the equivalent in other currencies);
(13)	Capitalized Lease Obligations	$220M	the greater of U.S.$220 million (or the equivalent in other currencies) and 5.00% of Consolidated Tangible Assets	$220M cap	3.14(b)(xiii) [10]§ 3.14(b)(xiii)(xiii) Capitalized Lease Obligations in an aggregate principal amount not to exceed the greater of U.S.$220 million (or the equivalent in other currencies) and 5.00% of Consolidated Tangible Assets at any time outstanding;
(14)	Indebtedness Incurred to finance the Fast-Track Solution, the Ethane Import Terminal or the Potential Cracker Expansion	$175M	None	$175M cap	3.14(b)(xiv) [11]§ 3.14(b)(xiv)(xiv) Indebtedness Incurred to finance the Fast-Track Solution, the Ethane Import Terminal or the Potential Cracker Expansion in an amount not to exceed U.S.$175 million at any time;
(15)	Guarantees of BI Servicios in connection with its foreign employees’ housing	$5M	None	$5M cap	3.14(b)(xv) [12]§ 3.14(b)(xv)(xv) guarantees of BI Servicios in connection with its foreign employees’ housing in an amount not to exceed U.S.$5 million outstanding at any time;
(16)	General Indebtedness	$126M	3% of Consolidated Tangible Assets	$126M cap	3.14(b)(xvi) [13]§ 3.14(b)(xvi)(xvi) Indebtedness of the Company or any Restricted Subsidiary Incurred on or after the Issue Date not otherwise permitted in an aggregate principal amount not to exceed 3% of Consolidated Tangible Assets at any time outstanding.
Σ Computable basket capacity		$686M	sum of 6 dollar-quantified clauses

Plus 10 qualitative baskets (unlimited / existing / refinancing / ratio-test) — not dollar-quantified here.

§ 4.12

Permitted Liens Limitation on Liens

In Compliance 1 computable

Permitted Baskets — Computable

Clause	Basket	Resolved Cap	Formula	Capacity	Section
(16)	General Liens basket	$130M	the greater of U.S.$130 million (or the equivalent in other currencies) and 3.00% of Consolidated Tangible Assets	$130M cap	Permitted Liens (xvi) [15]Permitted Liens (xvi)(xvi) Liens securing Indebtedness in an aggregate principal amount not to exceed the greater of U.S.$130 million (or the equivalent in other currencies) and 3.00% of Consolidated Tangible Assets at any one time outstanding; and

Plus 16 qualitative lien carve-outs (unlimited / existing / refinancing) — standard HY patterns.

§ 4.07

Restricted Payments Limitation on Restricted Payments

In Compliance 2 computable

Permitted Baskets — Computable

Clause	Basket	Resolved Cap	Formula	Capacity	Section
(5)	Repurchases of Capital Stock from current or former employees or directors	$5M	None	$5M	3.15(b)(5) [16]§ 3.15(b)(5)(5) if no default or event of default shall have occurred and be continuing, repurchases by the Company of Capital Stock of the Company or options, warrants or other securities exercisable or convertible into common stock of the Company from current or former employees or directors of the Company or any of its Subsidiaries or their authorized representatives upon the death, disability, severance or termination of employment or directorship of the employees or directors, in an amount not to exceed U.S.$5 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding calendar years, but not to exceed U.S.$10 million in the aggregate in any calendar year);
(9)	General Restricted Payments	$40M	None	$40M	3.15(b)(9) [17]§ 3.15(b)(9)(9) if no Event of Default shall have occurred and be continuing, other Restricted Payments in an amount not to exceed U.S.$40 million in any fiscal year.

Builder Basket § 4.07(a)(C) · cumulative capacity since Issue Date

Total gross capacity $0M

§ IV

Sources & Verbatim Citations Every computed figure traces to a specific clause and page in the source indenture.

17 citations · 1 source PDF

SOURCE 2019__7.45pct-2029__indenture.pdf EXTRACTED 2026-04-23 09:29 UTC

3.15(a)(3) · p. 62
(A) 50% of cumulative Consolidated Net Income of the Company or, if cumulative Consolidated Net Income of the Company is a loss, minus 100% of the loss accrued during the period, treated as one accounting period, beginning on the first day of the first full fiscal quarter in which the Issue Date occurs to the end of the most recent fiscal quarter for which consolidated financial information of the Company is available;
3.15(a)(3) · p. 62
(B) 100% of the aggregate Net Cash Proceeds, and the Fair Market Value of any property, received by the Company from any Person from any:
3.15(a)(3) · p. 62
(3) the aggregate amount of the proposed Restricted Payment and all other Restricted Payments made subsequent to the Issue Date up to the date thereof, shall exceed the sum of:
None · p. 24
“Net Debt to EBITDA Ratio” means, on any date of determination, the ratio of (i) Net Debt for the Calculation Period to (ii) EBITDA for the Calculation Period.
3.14(a)(i) · p. 57
(i) the Net Debt to EBITDA Ratio as set forth in an Officer’s Certificate would be no more than (a) prior to the first anniversary of the Loan Repayment Event, 4.50:1.00 or (b) on and following the first anniversary of the Loan Repayment Event, 4.00:1.00; and
3.14(a)(i) · p. 57
(i) the Net Debt to EBITDA Ratio as set forth in an Officer’s Certificate would be no more than (a) prior to the first anniversary of the Loan Repayment Event, 4.50:1.00 or (b) on and following the first anniversary of the Loan Repayment Event, 4.00:1.00; and
None · p. 7
INDENTURE, dated as of December 2, 2019, by and between Braskem Idesa, S.A.P.I. (the “Company”), a sociedad anónima promotora de inversión organized and existing under the laws of the United Mexican States (“Mexico”) and Deutsche Bank Trust Company Americas, a New York banking corporation, as trustee (the “Trustee”), registrar, paying agent and transfer agent.
None · p. 7
Each party hereto agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Company’s 7.450% Senior Secured Notes due 2029, issued hereunder.
3.14(b)(i) · p. 57
(i) Indebtedness pursuant to a Working Capital Facility Incurred in the ordinary course of business, Incurred on or after the occurrence of the Loan Repayment Event in an aggregate principal amount at any time outstanding not to exceed the greater of U.S.$150 million (or the equivalent in other currencies) and 3.50% of Consolidated Tangible Assets;
3.14(b)(xiii) · p. 60
(xiii) Capitalized Lease Obligations in an aggregate principal amount not to exceed the greater of U.S.$220 million (or the equivalent in other currencies) and 5.00% of Consolidated Tangible Assets at any time outstanding;
3.14(b)(xiv) · p. 60
(xiv) Indebtedness Incurred to finance the Fast-Track Solution, the Ethane Import Terminal or the Potential Cracker Expansion in an amount not to exceed U.S.$175 million at any time;
3.14(b)(xv) · p. 60
(xv) guarantees of BI Servicios in connection with its foreign employees’ housing in an amount not to exceed U.S.$5 million outstanding at any time;
3.14(b)(xvi) · p. 60
(xvi) Indebtedness of the Company or any Restricted Subsidiary Incurred on or after the Issue Date not otherwise permitted in an aggregate principal amount not to exceed 3% of Consolidated Tangible Assets at any time outstanding.
3.14(b)(ii) · p. 57
(ii) Indebtedness Incurred to finance, refinance or refund the purchase price or cost (including the cost of construction, development or improvement) of property or assets acquired by the Company or any Restricted Subsidiary (individually or together with other Persons) after the date hereof (by purchase, construction or otherwise), or Indebtedness Incurred to finance, refinance or refund, any such purchase price or cost in an aggregate principal amount at any time outstanding not to exceed U.S.$10 million (or the equivalent in other currencies);
Permitted Liens (xvi) · p. 30
(xvi) Liens securing Indebtedness in an aggregate principal amount not to exceed the greater of U.S.$130 million (or the equivalent in other currencies) and 3.00% of Consolidated Tangible Assets at any one time outstanding; and
3.15(b)(5) · p. 64
(5) if no default or event of default shall have occurred and be continuing, repurchases by the Company of Capital Stock of the Company or options, warrants or other securities exercisable or convertible into common stock of the Company from current or former employees or directors of the Company or any of its Subsidiaries or their authorized representatives upon the death, disability, severance or termination of employment or directorship of the employees or directors, in an amount not to exceed U.S.$5 million in any calendar year (with unused amounts in any calendar year being carried over to succeeding calendar years, but not to exceed U.S.$10 million in the aggregate in any calendar year);
3.15(b)(9) · p. 64
(9) if no Event of Default shall have occurred and be continuing, other Restricted Payments in an amount not to exceed U.S.$40 million in any fiscal year.