PONEIV brought attention to itself when launching a USD benchmark bond back in 2021. Our analysis concluded that the bond pricing illustrated an elevated cost-of-capital for coal-related credits.
S&P downgraded PONEIV to BB+ from BBB-. The reliance on coal, with an uncertain Asian outlook, is mentioned as one reason for this rating action. Fitch rates the company at BBB-, unchanged since issuance but affirmed in May 2023. Moody’s previously rated the company but withdrew the rating a year ago. This means that the credit now sits at a split rating between investment grade and high-yield.
Furthermore, the company has substantial loan maturities coming due, for a total of AUD506mm ($325mm). To refinance this debt, the company could either tap the bond market, or seek to renew loan financing where only select coal-financing banks will still offer capital. In the context of sustainable financing, PONEIV carries some significance; it has four sustainability-linked loans (SLLs), with KPIs covering a range of social and environmental metrics.