Research Update: Coronado Global Resources Downgraded To 'B' On Expected Operating Weakness; Placed On CreditWatch Negative

Australia-based metallurgical (met) coal company Coronado Global Resources Inc. is facing a weaker metallurgical coal price environment following COVID-19, and lower sales and production volumes than we expected in 2020 due to the temporary idling of its three U.S. mines, a fatality in January, and certain weather events. We anticipate credit metrics will deteriorate significantly through 2020, with negative free operating cash flow generation resulting in adjusted debt to EBITDA exceeding 5x. In addition, the company's liquidity position has deteriorated and may be insufficient to cover uses over the next 12 months. On July 7, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Coronado to 'B' from 'B+'. We also placed the ratings on CreditWatch with negative

...- Australia-based metallurgical (met) coal company Coronado Global Resources Inc. is facing a weaker metallurgical coal price environment following COVID-19, and lower sales and production volumes than we expected in 2020 due to the temporary idling of its three U.S. mines, a fatality in January, and certain weather events. - We anticipate credit metrics will deteriorate significantly through 2020, with negative free operating cash flow generation resulting in adjusted debt to EBITDA exceeding 5x. In addition, the company's liquidity position has deteriorated and may be insufficient to cover uses over the next 12 months. - On July 7, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Coronado to 'B' from 'B+'. We also placed the ratings on CreditWatch with negative implications. - The CreditWatch negative reflects the risk that the external operating environment will not materially improve over the next quarter, pressuring the group's liquidity position and access to...

Research Update