S&P cuts Conuma Coal

S&P said it lowered Conuma Coal Resources Ltd.’s issuer rating to CCC from CCC+ and its senior secured notes to CCC+ from B-. The 2 recovery rating on the notes is unchanged.

“We believe Conuma faces increased risk of refinancing its secured notes at par as credit market conditions have materially weakened amid longer-term uncertainty for the company. We believe Conuma will have to refinance its approximately C$200 million senior secured notes due May 2023 because its cash and liquidity are unlikely to be sufficient for full repayment,” S&P said in a press release.

The agency also noted Conuma’s Wolverine and Brule mines in the next few years. Without new development, the company will have to rely on its Willow Creek mine by 2025. Willow Creek accounts for about 25% of Conuma’s current total production.

The outlook is negative.

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