S&P ups New Fortress notes

S&P said it raised its ratings for New Fortress Energy Inc.’s senior secured notes to BB from BB- and raised the recovery rating to 2 from 3, indicating substantial (70%-90%; rounded estimate: 70%) recovery in default. The agency also affirmed the issuer’s BB- issuer rating.

“Global LNG market conditions continue to support NFE's credit profile. We estimate the company generates about 50% of its EBITDA from take-or-pay, capacity, or other tolling arrangements that provide good visibility into NFE's future cash flows. However, most of the improvement in EBITDA during the next 12-18 months will be from the sale of merchant cargo, primarily to European buyers,” S&P said in a press release.

The agency did not provide a specific reason for the upgrade on the notes.

The outlook is stable.

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