Investment Opportunity: Coronado Global Resources Bonds

February 2025

By Sandra Ang

Sell NCIG, Buy Coronado

Take Profits with NCIG 12.5 and Transition to Coronado 9.25 Bonds

Looking for a fixed income investment opportunity? Consider shifting from NCIG 12.5 to Coronado 9.25 bonds, maturing in October 2029. Many investors who initially purchased NCIG at prices in the 90s or low 100s have now accumulated substantial unrealised gains. Now might be the ideal time to lock in those profits and explore Coronado’s compelling fixed income investments.

Why Invest in Coronado?

Coronado Global Resources, headquartered in Brisbane, Australia, is a dominant player in the metallurgical coal industry. The company operates three mines across Australia and the US, with an impressive mine life expectancy of 22-32 years. Coronado’s bonds offer investors a unique fixed income opportunity, with a significant 1.8-2% yield pick-up (before costs) compared to their original issue price from September 2024.

Exploring Market Dynamics & Bond Structure

Investments from coal miners are becoming increasingly rare in the dollar market as global fund managers shift away from carbon-intensive industries. Coronado’s bonds, rated B1/Stable by Moody’s, are senior secured notes providing:

A first lien on all assets not securing the ABL facility.
A second lien on ABL collateral.

While these bonds lack financial covenants, they benefit from leverage restrictions (<3x) under the ABL facility, presenting a stable fixed income investment.

Benefits of Coronado as a Fixed Income Investment

Coronado bonds offer an opportunity to tap into a great fixed income investment opportunity by capitalising on higher yields. With the next call date in October 2026 and an optional early redemption at 104.62, now is an opportune time to adjust your fixed income portfolio.

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