- Genesis Energy was facing a very scary situation earlier in 2020 with them coming within a month of breaching their credit facility leverage ratio covenant.
- Thankfully they managed to execute a last-minute refinancing of their credit facility that saved the day, at least in the immediate future.
- When looking ahead they are still skating on thin ice with very high leverage and almost no margin of safety to avoid breaching their new higher covenant later in 2021.
- When looking even further ahead, they will require their earnings to recover within the next twelve months since this higher covenant is only temporary.
- Since the immediate risk has been removed my rating is being upgraded to neutral from bearish.
For further details see:
Genesis Energy: Last Minute Debt Refinancing Saves The Day, But Still Skating On Thin Ice