RATING DRIVERS
Supporting Factors:
- Stable and predictable revenue stream underpinned by long-term contracts with strategically important Jamaican entities
- The underlying asset consists of a modern, efficient electricity and steam generating plant, with good operating efficiency
- Adequate debt servicing capacity based on stable lease revenue
- The transaction structure provides adequate protection to investors
Constraining Factors:
- High leverage of Parent can hamper timeliness of financial support, if needed
- Unproven track record of consistent plant performance
Rating Sensitivity Factors
Factors that could, individually or collectively lead to an improvement in the ratings and/ or outlook include:
- Successful operations of the plant over the next two to three years, in accordance with design specifications and on time compliance with the PPA and SSA deliverables over the period
Factors that could, individually or collectively lead to a lowering of the ratings and/or outlook include:
- Deterioration in the financial performance of NFE SPH which could possibly hamper lease payments.
- Deterioration in the credit worthiness of the guarantor (NFE), impacting its ability to deliver in a timely manner any shortfall in lease payments if so required
- Breach in contract from the O&M counterparty, Caribbean Blue Skies Energy, that may affect operations.
- Any material litigation which may affect NFE SPH or NFE Inc
- Breach of any of the bond covenants
- A material reduction in the CHP plant’s availability which would impair its ability to deliver output stipulated in the PPA and SSA
COMPANY BACKGROUND
New Fortress Energy Incorporated (NFE or the Parent)[1], founded in 2014 in Delaware, USA, is a gas-to-power infrastructure business which focuses on converting existing power generation to run on natural gas, building new gas-fired power generation plants, operating downstream gas-to-power assets, and supplying such assets with natural gas. NFE is a publicly traded company on the NASDAQ exchange with a market capitalization of approximately US $8.6 billion[2]. NFE has been operating in the region since 2016, having established an onshore storage and regasification facility in Montego Bay, Jamaica in 2016, an offshore floating storage and regasification facility in Old Harbour, Jamaica in 2019 and an onshore facility in San Juan, Puerto Rico in 2020 to supply on-island industrial, commercial and transportation customers with liquefied natural gas (LNG). Furthermore, NFE completed the acquisitions of Hygo Energy Transition and Golar MLP, totaling US $5 billion, significantly increasing NFE’s global portfolio of critical infrastructure assets. Currently, NFE has ten facilities operational or under active development. This global portfolio of assets positions NFE to acquire and supply LNG to customers in a number of attractive markets around the world. In 2016, NFE incorporated a subsidiary NFE South Power Holdings Limited (NFE SPH) in Jamaica to own a combined heat and power plant (CHP Plant) and associated permits, entitlements, operational agreements and commercial agreements.
Analytical Contacts:
Nikkel Collymore
Tel: 1-868-627-8879 Ext. 240
E-mail: [email protected]
Keith Hamlet
Tel: 1-868-627-8879 Ext. 244
Mobile: 1-868-487-8356
E-mail: [email protected]
Website: www.caricris.com
Email: [email protected]
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