The announcement is clear about how each tranche of 400ktpa will be priced. While it would have been nice to know exactly what prices they'll earn under the 'fixed forward' curve, it would be extremely misleading if it turns out that 400kpta is being priced at US$37.5/t (well below spot). There's no need to conflate the US$150m of liquidity with the volumes being provided to Stanwell.
Providing 400kt at a discount of ~US$70/t would cost CRN ~US$30m pa for five years, which would be a cost of ~20% p/a on the US$150m liquidity. This would be in addition to of the 13% interest rate already stated... This would be extremely onerous, bringing the effective interest rate to well above 30%. I know that beggars can't be choosers, but they're not THAT desperate now that they have the ABL binding commitment from Oaktree.
CRN Price at posting:
17.0¢ Sentiment: Hold Disclosure: Not Held
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