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Investing.com -- Fitch Ratings has downgraded Coronado Global Resources Inc.’s (ASX:CRN) Long-Term Issuer Default Rating to ’CCC-’ from ’CCC+’ on Tuesday, citing weaker operational performance and liquidity concerns.
The rating agency also lowered the rating on the US-dollar senior secured notes issued by CRN’s subsidiary, Coronado Finance Pty Ltd, to ’CCC+’ from ’B’.
Fitch now forecasts that the metallurgical coal producer will deplete its cash reserves by the first half of 2026, despite securing a new asset-based lending facility and a deal with key customer Stanwell Corporation Ltd that provides prepayment and rebate deferral.
The company has secured a three-year $150 million ABL facility from an Oaktree Capital Management affiliate, replacing an earlier facility. However, only $75 million is immediately available, with the remainder subject to an increase in CRN’s borrowing base.
Stanwell has agreed to provide $75 million as prepayment and additional liquidity support of around $75 million through waiver and deferral of rebates from April to December 2025. These amounts carry 13% interest and will be settled by physical coal delivery over five years starting in 2027.
Fitch expects negative EBITDA for 2025 and 2026, leading to large negative free cash flow. Their forecast assumes an average metallurgical coal benchmark price of $180 per tonne in 2025 and 2026.
The rating agency noted that CRN’s output in the second quarter of 2025 has been affected by heavy rainfall and unplanned maintenance. The company has faced numerous operational shutdowns, which Fitch attributes to both management and asset quality issues.
Fitch believes CRN has options to boost liquidity within the next six to nine months, including selling equity stakes in mining assets and obtaining additional customer prepayments. However, these carry significant risk amid uncertainty around metallurgical coal prices and global interest rates.
The company plans to increase mining units at its new Mammoth underground mine in Australia and is adding raw coal storage and coal hoisting capacity at the Buchanan mine in the US. CRN also aims to optimize its contractor structure to reduce operating costs.
Premium hard metallurgical coal spot prices for Australia have fallen below $180 per tonne after a recovery in April and May 2025, due to weak demand in India and China.
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