- Following the first half of 2021, it appeared that the heavily impacted Genesis Energy had finally turned a corner with tentative signs of a recovery underway.
- Sadly this has not lasted into the third quarter of 2021 with the recovery subsequently stalling.
- Whilst already bad for their distribution coverage, more worryingly this has seen their covenant leverage ratio increase once again.
- It now sits above the soon to be imposed limit of 5.50 following the end of the first quarter of 2022.
- This means that they face a potential liquidity crisis as soon as early 2022 if their earnings fail to recovery quickly and thus, I believe that my neutral rating is still appropriate.
For further details see:
Genesis Energy: High Stakes With A Possible Liquidity Crisis As Soon As Early 2022