Investing.com -- On May 21, 2025, Moody’s Ratings announced the downgrade of Coronado Global Resources Inc.’s corporate family rating and the backed senior secured notes rating of Coronado Finance Pty Ltd to Caa1 from B2. The ratings remain under review for potential further downgrades.

The downgrade reflects Coronado’s rapidly weakening liquidity position, driven by a declining cash position and uncertainty surrounding its ability to secure external funding. While the company’s $150 million Asset-Based Lending (ABL) facility remains in place under a waiver until May 31, 2025, access to this facility is conditional and subject to the discretion of lenders.

Coronado’s continued loss-making operations and significant negative free cash flow at current prices make future access to the current facility unlikely, even if further covenant waivers are obtained. The company is actively seeking to replace the ABL facility through alternative counterparties, which may come at a higher cost but potentially with more flexible terms. The timing and success of this funding, however, remain uncertain.

In addition to seeking alternative funding, Coronado is exploring other liquidity measures. These include potential relief on Stanwell rebates and state royalty payments, as well as potential coal prepayment transactions. The feasibility and timing of these initiatives are also uncertain.

Coronado reported weaker-than-expected operating performance in the first quarter of 2025, which has further strained its liquidity. The company’s cash declined to $229 million as of March 31, 2025, down from $339 million at the end of 2024. If additional funding is not secured, the cash balance is projected to fall below $100 million at current price levels.

The company’s governance was a factor in the rating action, as it reflects a weakening in financial strategy and risk management practices. The review for further downgrade will focus on Coronado’s ability to secure additional funding over the next 30-60 days.

Coronado’s liquidity profile is weak. As of the end of April 2025, the company had a cash balance of around $200 million. Under base case prices, current liquidity is not expected to cover its remaining capital expenditure and working capital needs over the next 12 months without external funding support.

The company’s ratings could be downgraded further if the risk of a default event intensifies, or if recovery prospects for the company’s creditors weaken further. Conversely, the ratings could be confirmed at Caa1 if the company swiftly addresses its liquidity needs and strengthens its liquidity buffers over the next 12-18 months.

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