Fitch stabilizes Nickel outlook

Fitch Ratings said it changed the outlook on Nickel Industries Ltd. (NIC) to stable from negative and affirmed the long-term issuer default rating at B+. Fitch also affirmed NIC's $325 million of senior unsecured notes at B+ with an RR4 recovery rating.

“The outlook was revised due to the easing of liquidity risks following an average 12% increase in Fitch's nickel spot price forecast between 2023 and 2025 in March 2023. This reflects the structurally higher market prices and a rebound in stainless steel production on China's reopening,” the agency said in a press release.

Fitch said it forecasts NIC will post an operating cash flow of around $600 million per year in 2024 and 2025 on production increases at the Oracle Nickel Project and stable margins, driven by higher nickel prices.

“This will more than cover the liquidity requirements for the $325 million senior unsecured notes due 2024 and $225 million senior secured debt, including scheduled amortization, due 2025,” the agency said.

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