CVR Partners L.P. #B+# Ratings Outlook Revised To Negative On High Leverage

Stocks and Financial Services Press Releases Thursday May 31, 2018 09:05
NEW YORK--31 May--S&P Global Ratings

NEW YORK (S&P Global Ratings) May 30, 2018--S&P Global Ratings today affirmed its 'B+' long-term corporate credit rating on master limited partnership CVR Partners L.P. The outlook is revised to negative from stable.

At the same time, we affirmed our 'B+' issue-level rating on the partnership's senior secured notes due in 2023. The '3' recovery rating is unchanged, indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of default.

Our outlook revision reflects financial performance weakening more than we had expected and leverage will remain high this year at 7x. The pricing environment was very challenging for many nitrogen fertilizer producers over the last several years because of global supply that outpaced demand growth. U.S. nitrogen fertilizer prices reached multiyear lows in 2016 and fell sharply again in the latter half of 2017. As a result, our credit metrics for CVR Partners are weaker than we initially estimated, with adjusted debt to EBITDA about 9x in fiscal year 2017 compared with our forecast of 6x.

We could lower the ratings over the next 12 months if our forecast of adjusted debt to EBITDA indicates a considerable upward trend above 7x. This could stem from a stall or reverse in the price recovery of nitrogen fertilizers or a sharp decline in revenues due to less demand because of adverse weather conditions or unforeseen technical challenges that require a shutdown for extensive period. We could also consider lowering the rating if the credit quality of CVR Energy weakens. This could occur if refining margins at CVR Refining L.P. deteriorate materially.

We could consider revising the outlook to stable if cash flow prospects improve over the next 12 months relative to our expectations. This could stem from the continuation of the price recovery, perhaps driven by improved market demand for nitrogen-based fertilizer products, but without a material increase in market supply.

Latest Press Release

Fitch Rates EASY BUY#s THB Senior Unsecured Bonds at #AA+(tha)#

Fitch Ratings (Thailand) has assigned a National Long-Term Rating of 'AA+(tha)' to EASY BUY Public Company Limited's (EB; AA+(tha)/Negative) upcoming issue of senior unsecured bonds. The bonds will have a tenor of up to four years. KEY RATING...

Fitch Affirms Bangkok Aviation Fuel Services# #A(tha)# Rating, Rates Debentures

Fitch Ratings has affirmed Bangkok Aviation Fuel Services Public Company Limited's (BAFS) National Long-Term Rating at 'A(tha)' with a Stable Outlook. Fitch Ratings (Thailand) Limited has also assigned BAFS's proposed senior unsecured debentures of as...

Australian enterprises hope high for third CIIE

Five Australian enterprises signed up for the next edition of the China International Import Expo during a roadshow by the CIIE Bureau in Sydney, Australia on Dec 2. The Australian business community has said that it is looking forward to next year's...

SpaceChain Sends Blockchain Technology to the International Space Station

SpaceChain announced that its blockchain hardware wallet technology is on its way to the International Space Station (ISS), aboard a SpaceX Falcon 9 rocket as part of today's CRS-19 commercial resupply service mission. This is the first technology...

TMRW by UOB, first bank in Thailand to enable fingerprint and facial biometrics for speedier and safer account opening

TMRW by UOB, the first mobile-only bank for ASEAN's digital generation, today announced that it has enabled fingerprint and facial biometrics to make it speedier and safer for customers to open their TMRW accounts. In doing so, TMRW is the first bank in...

Related Topics