New Fortress Energy: With Debt Resolved, Few Obstacles Remain

No-moat-rated New Fortress capped a flurry of announcements on Oct. 1, 2024, with a $400 million equity raise, a painful but necessary condition for resolving the near-term debt issue that has weighed on the company for most of this year. The 2025 and 2026 term notes, along with a billion dollars, in revolving debt amounted to more than three billion dollars in cash demands over the next two years. While expensive at 12% interest along with certain other rights, the new debt pushes the maturities into 2029, when we believe the company will be on more stable footing. As a result of these transactions and revised guidance for delivered volumes, we are lowering our fair value estimate to $28 from $30.