Research Update: Nautilus Power LLC Subordinated Debt Rating Raised To 'CCC' From 'D', With A '6' Recovery Rating; Outlook Negative

Nautilus Power LLC (Nautilus) executed an amend-and-extend transaction in April 2023 that we viewed as distressed and tantamount to default for the non-extended tranche. The non-extended tranche is now subordinated to the extended term loan B (TLB) from a payment priority standpoint, as well as from a collateral package perspective, which is less than the original promise as there is now a more senior tranche. The project extended the maturity of about 98% of its debt outstanding to November 2026, thereby addressing its near-term refinancing risk. The non-extended TLB is due in May 2024, with an amount outstanding of $13 million as of the executed date. We raised the issue-level rating on the project's subordinated non-extended TLB to 'CCC' from

...- Nautilus Power LLC (Nautilus) executed an amend-and-extend transaction in April 2023 that we viewed as distressed and tantamount to default for the non-extended tranche. - The non-extended tranche is now subordinated to the extended term loan B (TLB) from a payment priority standpoint, as well as from a collateral package perspective, which is less than the original promise as there is now a more senior tranche. - The project extended the maturity of about 98% of its debt outstanding to November 2026, thereby addressing its near-term refinancing risk. The non-extended TLB is due in May 2024, with an amount outstanding of $13 million as of the executed date. - We raised the issue-level rating on the project's subordinated non-extended TLB to '###' from 'D', based on the proximity to maturity and the possible need for additional liquidity to repay this portion given its subordinated status, as almost all sources of revenues and reserves are now part of the superpriority collateral package....

Research Update