Fitch downgrades Enviva

Fitch Ratings said it downgraded Enviva Inc.'s long-term issuer default rating to RD, restricted default, from C and affirmed its senior unsecured debt at C/RR5.

The downgrade follows Enviva's failure to cure the missed interest payment on its $750 million of 6½% senior notes due 2026 upon expiration of its original 30-day grace period, Fitch said.

The company entered into a forbearance agreement with its lenders, bondholders and noteholders holding the requisite amount of principal amount outstanding or committed under the applicable facilities. The forbearance agreement ends on March 4 unless extended.

“Fitch expects the company to run out of liquidity by 2025 given current earnings and cash flows and believes debt restructuring is likely, absent success in renegotiating existing contracts with customers, as it seeks a new strategic plan ahead of its $750 million bond maturity in 2026,” the agency said in a press release.

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