Consolidated Energy - comment
The downgrade from Moody’s is a reaction to CONSEN not dealing with the $227m May 2026 SUN maturity yet. The Agency point out that available cash and RCF would not be enough to repay this note on its own. One option for CONSEN is to raise TLB debt at the CEL level (layering the SUNs until SUN debt can be raised). We expect this to be the most likely route, as we do not expect the Proman loan to be repaid in December. The downgrade will make raising SUN debt more difficult, as the CCC designation will exclude some investors. Furthermore, if the current political and military tensions in the Caribbean escalate, this could disrupt production at the Point Lisas facilities in Trinidad and Tobago, making raising SUNs more expensive. We continue to see the value of the assets covering the cap stack.