MARKETS

Credit confidence for Newcastle port plans

NEWCASTLE Coal Infrastructure Group's impressive progress with expansion works and relative insul...

Justin Niessner
Credit confidence for Newcastle port plans

Moody’s issued a (P)Baa3 rating with a stable outlook to the company’s proposed $US250 million of senior secured notes, which will be used by parent company NCIG Holdings to repay debt.

The provisional rating was attributed to NCIG’s ahead-of-schedule and under-budget completion of expansion activities on Kooragang Island at the Port of Newcastle in NSW.

The mechanical upgrade increases NCIG’s nominal capacity to 53 million tonnes of coal per annum.

Moody’s also cited NCIG’s stable cashflow generation and risk-mitigating shipping arrangements, which insulate the operator from unexpected drops in throughput volume.

However, downward pressure on the encouraging rating could result from major delays or cost overruns with continued expansion work or a weakening in demand for coal in the terminal’s catchment area.

“The ratings are supported by the group’s stable cashflows derived from ship or pay agreements entered into with its shipper shareholders and third-party shippers for the entire terminal capacity, as well as the ability to pass all operating costs (uncapped) and financing costs (up to a predetermined cap) on to its shippers”, Moody’s assistant vice president and analyst Matthew Moore said.

“The rating is also supported by the company’s progress to date on its expansion activities.

“This is balanced against the group’s highly leveraged capital structure with limited equity and thin coverage ratios (when balanced against all tiers of capital), the potential for unexpected execution challenges and cost overruns as the company expands the terminal export capacity and exposure to counterparty risk of its shippers.”

TOPICS:

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

A growing series of reports, each focused on a key discussion point for the mining sector, brought to you by the Mining Monthly Intelligence team.

editions

ESG Mining Company Index: Benchmarking the Future of Sustainable Mining

The ESG Mining Company Index report provides an in-depth evaluation of ESG performance of 61 of the world's largest mining companies. Using a robust framework, it assesses each company across 9 meticulously weighted indicators within 6 essential pillars.

editions

Mining Magazine Intelligence Exploration Report 2024 (feat. Opaxe data)

A comprehensive review of exploration trends and technologies, highlighting the best intercepts and discoveries and the latest initial resource estimates.

editions

Mining Magazine Intelligence Future Fleets Report 2024

The report paints a picture of the equipment landscape and includes detailed profiles of mines that are employing these fleets

editions

Mining Magazine Intelligence Digitalisation Report 2023

An in-depth review of operations that use digitalisation technology to drive improvements across all areas of mining production